Developers to tread carefully on the property frontier in Nigeria
SEEMINGLY buoyed by the growing apathy by commercial banks to fund projects and impact of on-going reforms by the government, a new report has called that developers could be more cautious in property development as the economy remains sluggish, and prepare to get a changing landscape.
The Lagos Housing Development Market - 2016 Outlook Report by Residential Auctions Company (RAC) revealed that "the next coming months and beyond will be analyzing times for programmers as demand will probably be curtailed with clients cutting back on spending until a clearer image of the market emerges to restore consumer confidence in the market.
"It's anticipated that lots of developers will tread carefully when embarking on new jobs to start and location of pick is a predominant factor. Also to hedge risks, developers will scale back on the size of projects they embark upon and will seek to come up with small-scale size projects that will provide not more than three - ten units, which will immediately attract sales even in the off-plan stage therefore removing Nigerianeyes News the occurrence of baseless units waiting to be sold several months after end that latest Naija news online will raise the expense of keeping stock."
Given the present economic atmosphere, the report projects that just a third of the 14,415 units now under construction will be delivered this year resulting in 4,325 units, "but unless developers can seek alternative financing asides from the commercial banks subsequently this amount might not be delivered.
"Some of those developments date back to over five years and there are several plausible reasons for the delay in delivery, one of such causes could be a dearth of funds that will hinder the power of the developer to fund the progress of the development or it might be a litigation case between parties involved. Generally it is usually the former that happens and unless a source of finance emerges the development will stay in limbo until a solution has been found.
This may possibly present the opportunity for developers to pursue "Bunch funding" that's an alternative type of raising financing from a group of investors through a web-based platform and is a relatively new concept."
The research says that 62 per cent of new home units in the development will soon be delivered in the Lagos Island market as shown above. This shouldn't come as a surprise since the Lekki- Epe axis still has a vast region of green field sites (un developed land) in Lagos.
"The future of the market looks pretty much complete as supply will continue to rise with demand and infrastructure is improved to attract more businesses. We can't categorically say that Lagos Island has more green field sites than Lagos Mainland or vice versa as there is no data to demonstrate or prove this theory, accordinng to RAC Managing Director, Mr. Omorotimi Akinlose.
He described, "Notwithstanding the Naija News Updates very fact that Lagos Island has got the majority of new components under going development, we cannot neglect or overlook that some places on Lagos Mainland for example; Ayobo Ipaja, Badagry and Okokomaiko also have vast variety of components in the development, a significant impact of a few mass home schemes launched under Joint-Venture (JV) organizations and are still awaiting conclusion.
RAC report said: "With the on-going rehabilitation and expansion of the Lagos-Badagry Expressway as well as the building of the Blue Line Lagos Rail Transport (LRT) mass transit transport system by the Lagos State Government (LASG), the Okokomaiko - Badagry axis part of Lagos Mainland really has the possibility to emerge as the next "Lekki" of Lagos Mainland in the future with relation to the delivery of new housing units in Lagos provided infrastructures continues to enhance along this axis.
"This could have a directive favorable impact on commercial activities in the positioning and certainly will become a catalyst to lure more residents from other locations on Lagos Mainland to migrate. The Blue Line is a 27km urban railroad line which will run to Marina from Okokomaiko. There will also be a Red Line which will run from Marina.
The report shown that beneath the Eko Atlantic City endeavor, a Public-Private-Partnership (PPP) initiative involving the Lagos State Government and a private company South Energyx Nigeria Limited (a subsidiary of the Chargoury Group of Companies) under the auspices of the Federal Government of Nigeria, over 1,000 units of apartments of various room sizes ranging from one bedroom to four bedroom penthouses are already under construction.
Leading the pack of these developments are Eko Pearl Towers by ESLA International. Eko Pearl Towers are lattest Naija news high rise residential buildings to be located in the centre of Eko Atlantic City.
It is going to comprise of five stunning residential towers on the harbor of Eko Atlantic. The towers are; White Pearl Tower, Black Pearl Tower, Indigo Pearl Tower, Champagne Pearl Tower and Aqua Pearl Tower. In total just somewhat over 560 flat units will be provided by the towers with one tower entirely sold out and the very first group of units is going to be delivered as early as 2016.
Another high rise development currently under construction in Eko Atlantic City is Eko Energy Tower Estate being developed by gas and oil logistics firm Orlean Invest West Africa a Nigerian Embassy Washington Dc United States group with over 25 years of supplying corporate and real estate services. Eko Energy Estate is a premium residential area that may cover about 450,000 square meters of land and will be found in the Northwestern corner of Eko Atlantic City.
The initial period of Eko Energy Estate will consist of three high rise 20 floors residential towers that will provide about 260 flat units of various amount of bedrooms is likely to be delivered by 2018 and as exemplified above.
It is projected that by the total completion of Eko Energy Estate there will be 5,000 flats in 50 - 60 residential towers.
Other famous residential developments currently in the works in Eko Atlantic City are LeReve Tower Lagos Sky Tower and Azuri Penisula.