lagos property market consensus report

Lagos Property Market

Consensus ReportH1 2020

Lagos State Branch

A consensus of 178 Estate Surveyors & Valuers and Property Professionals in Lagos, Nigeria

CH

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GING THE SKYLINES

From the Branch Chairman's Desk

The Data Agenda

Data is the singular most important

missing factor in the Nigerian real estate

market over the years.

Now, the wait is over! The Lagos State

Branch of the Nigerian Institution of Estate

Surveyors and Valuers (NIESV Lagos State

Branch), has responded to this call by

making available credible and reliable

property market data via this report. This

maiden edition of the Lagos Property

Market Consensus Report covers the half

year ( January - June) 2020 - H1 2020 with

data on rental and sales values of

residential and commercial properties

With the real estate sector still contributing

low to Nigeria's GDP at 7% and in view of

the expected growth by all players in

private and public sectors over the years,

there is need for data to aid the growth of

this all-important sector of the economy.

This need for data has witnessed the

advent of some individual organizations

which have released various real estate

outlook reports in recent years. However,

the availability of data on an institutional

scale to make it credible, measurable and

reliable has been the challenge.

While most advanced economies have

moved ahead with the availability of big

data, for development and investment

decision making by both public and private

sector players in real estate and housing,

the Nigerian market still suffers from a

dearth of data availability.

The report provides average rental and

sales values across the zones while the

Yield for each zone is captured. This is a

start. However, it remains relevant for good

use by private sector investors (both local

and foreign), professionals for advisory

services and the public sector for

measuring market progress and taking

developmental decisions which will affect

the sector and the economy at large.

The earlier prediction that the Nigerian real

estate sector was expected to grow at 2.65

percent in 2020, has now been distorted by

the COVID-19 pandemic. Similarly, the

initial plan for a quarterly release of this

report has also been affected, hence the H1

2020 report which covers major 30

neighourhoods in Lagos State, categorised

under seven (7) zones.

The release of the H2 2020 report, is

planned to coincide with our 50th Branch

Anniversary in December 2020. It will

provide data for an expanded coverage

area of Lagos State, including other aspects

of real estate like commercial retail and

industrial properties which are not covered

in this maiden report.

from 30 major neighbourhoods across

Lagos State.

The report, of course, has come at a

challenging time with the closure of the

world economy, Nigeria inclusive, due to the

lockdown during the COVID-19 pandemic,

which is currently being eased out.

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Lagos State BranchLagos State BranchLagos State Branch

August, 2020Dotun Bamigbola FNIVS, FRICS

Chairman, NIESV Lagos State Branch

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Content

Lagos State Branch

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From the Branch Chairman’s Desk

Page 02

Page 04 Executive Summary

Map of LagosPage 06

Consensus Pricing per Zone

Page 07

Property Rental Yields

Page 11

Conclusion Page 13

AppreciationPage 14

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Executive Summary

The Lagos Property Market Consensus

Report H1 2020 is a published account of

average property values across various

locations in Lagos State. Using the spot

consensus capital and rental values, the

rental yields for each location were also

computed. The aim of the consensus

report is to provide broad real estate data

and promote transparency of the Lagos

property market for good investment

decisions. The report will be of utmost

benefit to major stakeholders l ike

professionals, investors, end users and

government agencies. The data was

provided via survey by 14 Fellows of the

Institution (FNIVS), 86 Associate members

(ANIVS) and 78 Probationers/Graduates

intending members.

A controlled consensus survey was

adapted to ascertain the average property

values per location. To achieve this, Lagos

State was divided into 7 zones: Island 1

(Lagos Island, Old Ikoyi, S/West Ikoyi,

Banana Island, Victoria Island), Island 2

(Lekki Phase 1, Ikate, Osapa, Agungi &

Chevron), Island 3 (Ajah, Sangotedo,

Awoyaya & Lakowe), Mainland 1 (Surulere,

Yaba, Ilupeju & Gbagada), Mainland 2

(Amuwo Odofin, Isolo, Festac, Apapa),

Mainland 3 (Ikeja GRA, Maryland, Ikeja &

Alausa) and Island 4 (Ogba, Ogudu,

Magodo GRA 1 (Isheri) & Magodo GRA 2

(Shangisha).

Table 1: H1 2020: Average Land, Residential & Office Prices in Lagos

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Island Zone 1

Island Zone 2

Island Zone 3

MainlandZone 1

MainlandZone 3

MainlandZone 2

MainlandZone 4


Data was gathered on the average land

prices, 3-bed & 4-bed rental and sale prices

and office space prices, in the various

locations mentioned above. Island 1 zone

recorded the highest land prices followed

by Mainland 3. This is a reflection of the

deepened level of commercialization in

these 2 zones. The growing development in

nascent Island 2 areas is also reflected in its

h i g h p r i c e o f l a n d a v e r a g i n g

₦112,021/sqm. Per house types, Island 1

zone has the highest values (rental & sale)

for both 3-bedroom and 4-bedroom

houses. The same also goes for office

space rental values.

Utilizing the average residential capital

values and rental values in 30 nodes within

the state (Lagos) the corresponding rental

yields were computed as shown in the

chart above. Chevron showed the highest

yield of 6.87%, next was Agungi (6.31%),

while Osapa came in third with 6.06%. The

lowest yield was seen in Ogudu – 3.10%,

next being Magodo Shangisha – 3.19% and

third being Magodo Isheri 3.20%. The

median yield in Lagos state from this

consensus analysis is 4.32% and it is

obtainable in Yaba.

As mentioned earlier, this report aims at

closing a previous gap of unavailability of

property price data. However, in using this

data provided, It is critical to understand

that these figures are averages of a

consensus of value opinions and may not

reflect every individual transaction.

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Lagos State Branch

Table 2: H1 2020: Average Residential Rental Yields


Island 2

Ajegunle

Island 3

Mainland 1

Mainland 3

Mainland 4

Mainland 2Island 1

ISLAND 1 MAINLAND 1

1. Lagos Island

2. Old Ikoyi

3. South-West Ikoyi

4. Banana Island

5. Victoria Island

6. Lekki Phase 1

7. Ikate

8. Osapa

9. Agungi

10. Chevron

11. Ajah

12. Sangotedo

13. Awoyaya

14. Lakowe

15. Surulere

16. Yaba

17. Ilupeju

18. Gbagada

19. Amuwo Odon

20. Isolo

21. FESTAC

22. Apapa

23. Ikeja GRA

24. Maryland

25. Ikeja

26. Alausa

27. Ogba

28. Ogudu

29. Magodo GRA 1 (Magodo Isheri)

30. Magodo GRA 2 (Magodo Shangisha)

ISLAND 2 ISLAND 3 MAINLAND 2 MAINLAND 3 MAINLAND 4

Map of Lagos State Showing zonal structure adopted in the Lagos Property Market Consensus Report

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Consensus Pricing Per Zone

Table 3: Island 1

Lagos Island, Old Ikoyi, South-West Ikoyi, Banana Island & Victoria IslandZone A

Responses were gotten from 24 practicing

Estate Surveyors and Valuers /property

professionals in areas such as Lagos Island,

Old Ikoyi, South-West Ikoyi, Banana Island

and Victoria Island. Banana Island

commanded the highest value across all

property categories and still maintains its

status as the most expensive location in

Nigeria. In terms of house and office types,

Banana Island and Old Ikoyi are the upper-

class markets with both recording an

a v e r a g e o f ₦ 1 4 3 , 3 3 3 / s q m a n d

₦ 1 0 5 , 2 6 3 / s q m f o r o ffi c e s p a c e

respectively. Lagos Island commands the

lowest value across all categories. This is

largely due to infrastructure stress and

increasing densification in the area.

Victoria Island is home to a number of

luxury apartments, flats, maisonettes and

penthouses and this is reflected in its high

rental and sale price for a 4-bedroom

house. Property data from this zone has a

h igh response rate f rom serv iced

commercial and residential uses.

Table 4: Island 2

Lekki Phase 1, Ikate, Osapa, Agungi & ChevronZone B

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Estate Surveyors and Valuers /Property

Professionals in areas such as Lekki Phase

1, Ikate, Osapa, Agungi and Chevron. Land

values commanded the highest in Lekki

Phase 1 – ₦173,519/sqm on the average.

Lekki Phase 1 has grown to become a

choice location for investment and is

becoming increasingly so. Ikate's proximity

to Lekki Phase 1 has positioned it the 2nd

highest-class market in the zone. Osapa

and Chevron are doing relatively well, and

values will likely be on the increase. The

flooding situation in Agungi axis has

hampered a little on its property market

and is commanding the lowest values in

the zone. Property data from this zone has

a high response rate from serviced

commerc ia l and res ident ia l uses ,

particularly around the Chevron area,

which has mostly serviced residential

estates. This has significant impact on the

rental and sales values.



Professionals in areas like Ajah, Sangotedo,

Awoyaya and Lakowe. Ajah seems to have

the highest values followed by Sangotedo.

Nascent locations such as Awoyaya and

Lakowe, though having the lowest values

presently, are home to upcoming and

future developments. The introduction of

major businesses and presence of

supporting infrastructure will further

increase the property values in these

locations and entire zone.

Table 5: Island 3

Ajah, Sangotedo, Awoyaya & LakoweZone C

Table 6: Mainland 1

Surulere, Yaba, Ilupeju & GbagadaZone D

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Lagos State Branch




Professionals in the following locations:

Surulere, Yaba, Ilupeju and Gbagada. In

terms of land prices, Ilupeju holds the

highest value, followed by Gbagada. This is

largely a result of the industrial and

commercia l concentrat ion in both

locations compared to Yaba and Surulere.

Rental prices for 3-bedroom apartments in

Surulere and Gbagada seem to have the

same value while Yaba records the lowest

in the pack. Though residential values

seem to higher in Surulere than Yaba, price

for office spaces are higher in Yaba.


Estate Surveyors and Valuers in Amuwo

Odofin, Isolo, Festac and Apapa. Land

prices command the highest in Apapa

averaging ₦80,714/sqm and commands

the lowest in Isolo, ₦17,400/sqm. Some

parts of Apapa still accommodates high-

income citizens and upscale apartments.

This is reflected in the property values

(rental and sale) in Apapa compared to

other locations. Amuwo Odofin serves as a

covering for FESTAC, both recording close

residential values. In terms of land and

house types, Isolo records the lowest

values in the zone.

Table 7: Mainland 2

Amuwo Odofin, Isolo, FESTAC, ApapaZone E

Table 8: Mainland 3

Ikeja GRA, Maryland, Ikeja & AlausaZone F

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Lagos State Branch



Estate Surveyors & Valuers /property

professionals in areas like Ikeja GRA,

Maryland, Ikeja and Alausa. Ikeja GRA has

the highest values across all property

categories including office space prices.

Alausa plays host to the Lagos state

government secretariat and other major

institutions. This is reflected in its high land

and house prices. Ikeja metropolis is highly

commercial and is the location for many

offices and businesses, and is the 2nd

highest location for office spaces in the

zone.

Responses were gotten from 24 property

professionals in areas such as Ogba,

Ogudu, Magodo GRA (Isheri) and Magodo

GRA (Shangisha). Magodo Shangisha is

home to high-class citizens who reside on

the mainland. This is reflected in its high

price values, leading the chart in the zone.

Though in close proximity to Shangisha,

Magodo Isheri commands lower value

especially for office spaces. Ogudu has

grown to become a favorable location for

the mid and high-income class due to its

serenity and accessibility. Ogba commands

the lowest values in the zone with rental

price for a 3-bedroom apartment standing

at ₦756,522 per annum

Table 9: Mainland 4

Ogba, Ogudu, Magodo GRA 1 (Isheri) & Magodo GRA 2 (Shangisha)Zone G

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Lagos State Branch


Table 11: Island 2: Rental Yield (%)

Rental Property Yields

Via a consensus of Estate Surveyors and

Valuers and other Property Professionals

in Lagos state, average residential capital

values and rental values in 30 nodes within

the state (Lagos) were computed. The

rental yields were computed using the

formula:

Average Rental Value

Average Capital ValueX 100 = Rental Yield

From the consensus data, Chevron showed

the highest yield of 6.87%, next was Agungi

(6.31%), while Osapa came in third with

6.06%. The lowest yield was seen in Ogudu

– 3.10%, next being Magodo Shangisha –

3.19% and third being Magodo Isheri

3.20%. It is critical to understand that these

figures are averages of a consensus of

value opinions and may not reflect every

individual transaction.

Table 10: Island 1 Rental Yield (%)

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Lagos State Branch

Table 13: Mainland 1 Rental Yield (%)




Table 12: Island 3: Rental Yield (%)


Conclusions

Following the consensus survey carried out

on average property prices, the following

conclusions are pertinent:

1. Land and house prices in Island 2 and

Island 3 zones are likely to keep

increasing as the area welcomes more

development. Major projects like the

ongoing Dangote Refinery, Lagos Free

Trade Zone, 4th Mainland Bridge and

new city – Alaro City, which are all

expected to come onstream in a few

years. upon completion, will further

trigger the rise in property values in the

zones.

2. Island 1 records the highest rentals for

office spaces in Lagos State. The high

rental costs of Grade A office buildings

located in Banana Island, Ikoyi and

Victoria Island have contributed to this.

However, Lagos Island, though situated

4. Ikeja GRA and its surrounding areas like

Maryland, Mende, Shonibare estate

remains the most expensive locations

on the mainland part of Lagos State.

This is expected to continue as more

r e s i d e n t i a l a n d c o m m e r c i a l

development come up in these

neighbourhoods, particularly Ikeja

GRA, in few years' time.

in the same zone is home to the highest

offices and businesses with rental costs

as low as N22,413/sqm.

3 . T h e p r e s e n c e o f s u p p o r t i n g

infrastructure has contributed to the

capital value increase in Mainland 4

especially in Ogudu and Magodo

Shangisha areas, but this has not met

corresponding renta l va luat ion

resulting in lower yields.

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Appreciation

Our appreciation goes to all registered Estate Surveyors and Valuers as well as other

Property Professionals who are practicing in Lagos State for their immense contributions

towards the success of this maiden Lagos Property Market Consensus Report (H1 2020).

Special appreciation to members of the Research and Development Sub-Committee of

NIESV Lagos State Branch, whose hard work and creativity has produced this report.

Research & Development Sub-Committee Member

Kevin Ofili

Abosede Ige

Tayo Odunsi

Nnenaya Awoyokun

Olukayode Abdulazeez

Alabi Afeez

Alabi James

Bamidele Oyewunmi

Adebila Owokade

Prof. Modupe Omirin

Dr. Emeka Iroham

– Sub-Committee Chairman

– Sub-Committee Secretary

– Member

– Member

– Member

– Representative of University of Lagos

– Representative of Yaba College of Technology

– Representative of Lagos State Ministry of Housing

– Representative of LASURA

– Adviser

– Adviser

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Contributing Firms

15w w w . n i e s v l a g o s . o r g

Plot A, Block 12, Elephant Cement Way,

CBD Alausa, Ikeja, Lagos.

Tel: +234(0)807913333

[email protected]

[email protected]

www.niesvlagos.org

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