2022 Nigeria Real Estate Market Outlook (Compressed)

2022
Nigeria
Real Estate
Market Outlook
www.northcourtrealestate.com
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SUMMARY
A Pre-Election Year
A ll markets have continued to adjust

to the pandemic - but each market
has had to adjust in its own way
and the real estate market is no exception.
Over the next 20 years, analysts expect that
are increasingly savvy in real estate
investing, a fact not lost on brokers in
Nigeria's real estate market. Property agents
report growth in tenant requirements for
apartments in cities – out with the
the value of global investable real estate will swimming pool and in with an income
grow by an average of 5.2% annually to generating short stay apartment. And this
exceed $85Trn. The investment rationale population is on the increase. Data from the
for owning real estate remains attractive, United Nations suggest that Abuja will be
macroeconomic shocks and political the fastest growing city in Africa, exceeding
forebodings regardless. The world's largest 6% growth by 2025. Lokoja ranks fourth on
black population heads to the polls in 2023. the list with a projected 5.93% growth. This
The pandemic, in its various iterations (the will make the demand for infrastructure and
latest being Omicron as of the time of housing even more apparent. Commercial
writing), delivered more blows to the capital, Lagos didn't make the top 5.
economy, ensuring that the Q3 foreign
trade balance recorded negative N3Trn. Prices in leading cities for land and
Weakening non-oil revenues, while slightly residential apartments have moved up.
recovering by Q4 of 2021 nag the present Studios, 1 and 2 beds are now a staple of
government. To shore up accounts, the the average portfolio. Second-tier cities
government took to raise record sums in the have not been too far behind with
bond market – N2.6Trn by some estimates. developers launching small sized gated
The President signed the Petroleum communities. Warehouses have become
Information Bill in a bid to improve energy even more critical to the functioning of the
governance. Still, the perception of Nigerian economy. Flexible terms and
corruption remains a source of concern. smaller space requirements have come to
characterise the Grade A office market.
Grand announcements of government led
expenditures on social projects are expected The Edo state government signed up the
in 2022 as the authorities rediscover the Persianas Group, developers of the Palms
sensitivities of the average citizen. Grade A mall in Lagos to develop a retail
Millennials and Generation Z now influence centre in Benin city and made significant
spending in excess of $600Bn globally and progress with the German government on
the return of 7,000 artefacts taken from the
2022 Nigeria Real Estate Market Outlook 4

Benin Kingdom. Luxury lifestyle brand -
Montblanc opened its first standalone
boutique in Nigeria
Development Partners International (DPI), a

“
Flexible terms and
private equity firm focused on Africa, sold a
smaller space
portion of its stake in fast food chain, Food
requirements have come
Concepts - the parent company of Chicken
to characterise the
Republic, for an undisclosed amount. The
Grade A office market
“
Federal Executive Council approved
$17.47Bn for the purchase of office block -
Kanti Towers, Victoria Island, Lago by the
Nigeria Maritime Administration and Safety
enabling digital shopping. We expect
Agency as its new headquarters. Digital
demand for warehouses, distribution
infrastructure company, Equinix announced
centres, and other properties that allow e-
its intention to acquire Nigeria's data centre
commerce will continue to rise. In places
and connectivity giant, MainOne for
where white-collar occupations are
$320M. Local investors across residential,
increasing the quickest, we're also seeing an
retail, healthcare especially have
uptick in the demand for office space.
demonstrated a growing, almost strident
Erstwhile local developers are proving more
confidence in the Nigeria real estate market.
sophisticated, holding their own when
Ketron Investments bought out retailers -
compared with their African counterparts.
Shoprite and Purple raised a N5bn Sukuk
We will however discuss the elephant in the
Bonds Issue, achieving 100% subscription.
room, the collapse of the 21-floor luxury
The migration to e-commerce and remote residential building in the Ikoyi, Lagos area.
working is expected to last long after the
pandemic has passed, altering the Ayo Ibaru
frequency and use of workplaces while COO/Director - Real Estate Research
Lagos, Nigeria

CONTENT
04 08
SUMMARY THE NIGERIA
“Flexible terms and smaller ECONOMY IN
space requirements have
come to characterise the 2021
Grade A office market” “The Nigerian government,
above all, has pursued policies
of economic liberalisation and
strategic alliances with
foreign firms”
11 17
TOPICAL INVESTMENT
ISSUES MARKET
How did 21 floors “2021 is a record year for bond
collapse? sales - over N2.6Trn sold with
most of the funding coming
from domestic investors”
21 51
REAL ESTATE 2022
SUMMARY OUTLOOK
“Abuja has seen demand for “Pharmaceuticals, food and
residential assets increase drink, groceries and
because of its position as one telecommunications
of the more secure locations accessories are projected
in the country” to be the likely winners”

THE NIGERIA
ECONOMY IN 2021
N igeria produces the most oil on the

African continent, the downside of
which is an enduring tardiness with
its diversification plans. The United
Kingdom, the Netherlands, and France are
large domestic market (Africa's most
populous country) and the continent's
highest GDP, the country draws big-scale
investments. The Nigerian government,
above all, has pursued policies of economic
among the major countries investing in liberalisation and strategic alliances with
Nigeria. Nigeria receives about 27% of foreign firms.
overall European investment. Due to its
Exchange rates ($/N) Oil price per barrel ($)
Source: CBN
Although the pandemic hampered oil and businesses are working on separate projects
petroleum production and consumption for totalling $52.6Bn, with Dangote Refining
much of 2021, the nation is forging ahead and Midis Energy Services coming in at
with four received proposals totalling more $12Bn each; and SPDC and NNPC with
than $30Bn, including $10Bn offers from $4.3Bn at the top of the list.
the Shell Petroleum Development Company
of Nigeria (SPDC), the NNPC and Chevron The immediate goal of the PIB is to eliminate
Nigeria, as well as a $200M project from Eko all regressive fuel and energy subsidies, with
Petroleum and Refining Company. There adequate compensation for the
are 15 projects in the pipeline estimated at underserved. A market-based and
$72.6Bn, with another NNPC initiative transparent pricing structure will be
accounting for half of that. Another 21 implemented in early 2022, as outlined in

the 2021 Petroleum Industry Act. Pundits it is critical to developing consensus and
suggest that because previous attempts to public trust in protecting the poor and
remove fuel subsidies in Nigeria have failed, saving resources.
Inflation (%) External Reserves ($)
41.83 40
36.22 35.68 35.36 33.66
35.66 35.23
34.76 34.94 33.42
Source NBS
The removal of the official exchange rate is a prices. To contribute positively to investor
positive move, but the prolonged reliance confidence, exchange rate adjustment
on administrative procedures to handle FX should be accompanied by clear
shortages creates uncertainty and raises the communications about future exchange
danger of a major and abrupt change in the rate policy, plans to manage inflation, and
exchange rate. Analysts recommended structural policies to facilitate new
moving to a single rate as soon as possible, investment to maintain competitiveness.
taking advantage of the current global
“
conditions, potentially increasing the
current account, and steadily growing oil
The Nigerian government,

above all, has pursued
policies of economic
liberalisation and strategic
alliances with foreign firms “

TOPICAL ISSUES
PASSED AT LAST The law aims to address the administrative

difficulties encountered by industry parties.
Over the 20 years has taken the Nigerian As such, the administrative portion of the
government to sign the Petroleum Industry PIB seeks to enhance governmental
Bill, Nigeria has lost at least $50Bn in institutions, promote transparency and
investments prior to the signing. Under the promote sustainable development in
Bill, The NNPC is to be fully commercialised Nigeria's oil and gas sector. The host
into a limited business within six months. community section provides for the
The bill establishes a legal, governance, establishment of host community
regulatory, and budgetary framework for development trusts to foster long-term
the petroleum industry. Nigeria is Africa's prosperity, promote peace and foster
largest oil exporter, accounting for more positive relationships between licensees,
than 90% of the country's foreign exchange lessees, and the communities. Settlors are
and 70% of government revenue. The also required to donate 3% of their prior
government intends to raise the country's oil year's actual operating expenses to a fund
reserves to 40Bn barrels from the current administered by the Trust for the
37Bn barrels, as well as production to 4M communities' socioeconomic development.
barrels per day from the current 2.5Mbpd. Once more, the county has put forth yet
another bold legislation. Enforcement once
The PIB is anticipated to be a balance
again remains a cause for concern.
between the interests of the CBN and
portfolio investors and is unlikely to result in
a significant gain in revenue. It intends to MTN VS COMMERCIAL BANKS
commercialise the petroleum sector's
(PART 2)
governance framework by clearly
separating regulatory and commercial The CBN granted MTN Nigeria and Airtel
organisations to enhance sector efficiency Africa Payment Service Bank (PSB) licences
and transparency. Additionally, it in principle. The decision to give PSB licences
establishes the Nigerian Petroleum sector's to the two largest telecoms operators in
institutional architecture. The Act's fiscal Nigeria is following the bank's mission of
portion establishes the framework for expanding financial inclusion and the
increasing investment in the petroleum development of the payment system
industry while also producing money for the through a secured technology-driven
Government.

environment. The permission was the first MainOne also owns a subsea network
step toward final approval, subject to the connecting Portugal to Nigeria and a
satisfaction of regulatory requirements. This 1,200km terrestrial fibre network in Nigeria.
means that the dependence on commercial When finalised, this acquisition would
banks is reduced, and a complete extend Equinix into West Africa, offering
disconnection may be in the offing. The enterprises based inside and outside of
PSBs are to operate primarily in rural and Africa access to one of the world's fastest-
unbanked areas, targeting financially growing marketplaces. MainOne also
excluded people, with at least 25% financial provides access to significant internet
service touchpoints in such remote areas. exchanges to key worldwide networks such
as Amazon, Microsoft, Apple, Google, and
The primary goal of establishing PSBs was to Facebook; over 800 B2B customers,
improve financial inclusion by expanding including large multinational technology
access to deposit products and organisations, social media companies,
payment/remittance services to small global telecoms operators, financial service
businesses, low-income households, and providers, and cloud service providers.
other financially excluded entities through
high-volume, low-value transactions in a
secure, technology-driven environment. CHINA COMES TOWN
They will also form direct partnerships with
card system operators, although these cards The Chinese government announced that it
will not be suitable for foreign currency would deliver 1Bn doses of COVID-19
vaccines to Africa, 40% of which would be
transactions. They are required to install
manufactured on the continent in
ATMs in some of these locations, as well as
partnership with African manufacturers. This
Point of Sale devices, and will be able to
was one of the major announcements at the
conduct business through banking agents.
Forum on China–Africa Cooperation
(FOCAC) conference. The conference, which
THE MAINONE ACQUISITION aims to align Chinese and African interests
holds once every three years. Other
Equinix announced its intention to acquire announcements included a pledge to
West African data centre and connectivity increase Chinese importation of African
solutions provider - MainOne who has products, Chinese participation in African
operations in Nigeria, Ghana and Côte poverty reduction programmes, a green
d'Ivoire. The $320M transaction is expected development programme, a capacity building
to close in Q1 2022, subject to regulatory programme, and a digital innovation
approvals. MainOne's digital infrastructure programme, all of which are outlined in the
assets include three operational data Dakar Action Plan (2022-2024), the China-
centres, with an additional facility under Africa Cooperation Vision 2035, the Sino-
construction due to start operations in Q1 African Declaration on Climate Change.
2022. Upon completion, these facilities will China's financial pledge reduced from $60Bn
provide more than 64,000sq. ft. of space to in 2018 to $40Bn (This amount however
Equinix, as well as 570,000 sq. feet of land excludes the monetary value of the vaccines,
for future expansion. which when calculated at $33.33 a shot
evens out the figure). There was little said

about Africa's trade independence from the SPENDING PATTERNS OF A PRE-
Chinese government. ELECTION YEAR
Other programmes announced include a
The proposed N16.4Trn budget for 2022
comprehensive COVID-19 vaccine rollout
has a N6.25Trn deficit - around 3.39% of
programme, which includes 1,500 medical
GDP. This is slightly higher than the 3% cap
staff; $300Bn in total African imports,
established by the Fiscal Responsibility Act
contributing $10Bn in trade financing.
2007 (FRA). The deficit is expected to be
While the nation will be stepping back from
funded through borrowing, privatisation
mammoth projects, it will implement digital
earnings and proceeds from project loans.
economy projects for Africa, establish
The largest expense category is non-debt
satellite remote sensing cooperation
recurrent spending at N6.83Trn, 60% of
centres for China and Africa, and promote
which is allocated to personnel expenses,
the creation of joint laboratories, partner
pensions: gratuities and overheads at
institutions, and scientific and technical
N4.11Trn. The budget assumes a
innovation cooperation bases.
benchmark crude oil price of $57pb, up
China chose Nigeria as the first African country from 2021's $40 per barrel, oil production of
to be designated as a strategic partner. Bilateral 1.88Mbpd, an exchange rate of N410.15 to
commerce has increased from $1.9Bn in 2013 the dollar, a target inflation rate of 13% and
to almost $20Bn in 2019. Nigeria is also a key a 4.2% GDP growth rate.
destination for Chinese manufacturing
enterprises, with clusters in Lagos and Ogun Here's where things get interesting. The
and Edo states. Still, there are allegations official exchange rate of N410.15 to $1 is
suggesting mistreatment of their Nigerian impractical seeing that the unofficial market
employees, who are exposed to harsh rate is N570 per dollar and rising. The
conditions. This theme is consistent with benchmark rate may not hold for much of
reports from other African nations. 2022. Target inflation and GDP growth
goals also appear unrealistic, given this
Chinese banks are considering establishing year's average inflation rate of 17% and
operations in Nigeria which provides an current GDP growth of approximately 2%.
opportunity to lead, potentially as the
continent's financial centre. Some however 70% of the budget is recurrent, while 30% is
argue that Nigeria does not currently expected to be capital meaning that once
present an attractive investment again, the nation is investing less in her
opportunity due to its volatility and future than her present. For context, 1M
government missteps. public employees and their dependents are
covered by recurrent expenditures while
“
China chose Nigeria as
the first African country
210M citizens are covered by capital
expenditures. Former presidents are
entitled to N2.3Bn. This is separate from the
N1Bn is set aside for severance benefits for
to be designated as retired government and parastatal heads.
“
a strategic partner The N2.4Trn defence budget is justifiable
considering the country's security situation.

But the drivers of insecurity - increased COVID19: THE AGE OF OMICRON
poverty and high unemployment, remain.
Asides infrastructure, which is expected to On November 26, 2021, WHO's Technical
cost N1.45Trn, education and health got Advisory Group on Virus Evolution
N1.29Bn and N820Bn respectively, or 0.8% recognised SARSCoV2 variant B.1.1.529 as
and 5% of the budget. Paltry by any a variation of concern (VOC). Omicron is the
reasonable standards. name given to this variation which was first
reported two days earlier and infections
Per 2021 budget implementation records, have spiked in recent weeks in South Africa.
H1 revenue for 2021 was N2.31Trn, Omicron features an extraordinary amount
69.64% of the projected N3.31Trn. This was of mutations, some of which may extend
the 6th consecutive earnings miss. The IMF the pandemic's trajectory.
projects that Nigeria's economy will grow by
2.6% in 2021, driven by a recovery in non-oil Dutch health authorities announced that
sectors (as seen in the H1 2021 they found the variant going back 11 days
implementation figures) and higher oil before the first cases were identified in
prices. Growth will inch up slightly to 2.7% southern Africa. Leaving aside the debate
in 2022 and likely remain at this level over about its origin and distribution, leading
the medium term, allowing GDP per capita western countries have put travel bans on
to stabilize at current levels. African countries. The latest, and most
concerning to Nigerians, is the one imposed
on Nigerians by the UK, and Canada.
COVID regardless, Nigerians moved on with their lives

Movement trend compared with the start of the year
Source: Google

8, 15, 21 which would normally be home to the
highest-end buildings, might represent a
The Ikoyi area of Lagos state comes to mind turning point in the sector. This report
as the peak of Nigerian residential real suggests 3 possible outcomes.
estate. Luxury developments dot its skyline
and its price points constitute the highest First, changes in the regulation of
barriers to entry to any real estate market in construction and real estate industry which
the country. So, it came as something of a could play out in stricter regulations
sad surprise that a 21-storey block of enforced for property development for a
residential apartments, the third in a set of short period - and then business continues
three, collapsed on the 1st of November. as usual in the long run. A variant of this
Aiming to finish in 2022, the construction case for stricter regulatory compliance will
was already 80% completed and priced be self-imposed enforcement by
between $1.2M and $5M per unit. It was construction and real estate professionals.
65% sold out. The project was not insured This is what may foster longer lasting
as required by the Lagos State Physical change. There might also be a review of
Planning Permit Authority (LAPPPA) practice qualifications for construction and
meaning that compensation for the victims real estate professionals by the various
and subscribers will be complicated regulatory associations with stricter
regulation and enforcement.
A lack of concrete cube test results for each
stage of construction meant that Second, there will be changes in demand in
engineering firm, Prowess engineering the local real estate market. Location, price,
could no longer guarantee the building's and finish have traditionally trumped quality
integrity and subsequently pulled out of the and even size in real estate demand.
project. Again, original approvals for the However, with this recent occurrence, there
structure were for 8 floors. This would later will most certainly be a shift in demand for
be changed to 15 and finally, 21 throwing quality. However, due to economic realities,
the initial calculations supporting the low-grade real estate items will continue to
building's structural integrity out of whack. be in high demand.
The steep decline in the currency's exchange
Third, we expect changes in supply in the
value also meant that building materials
local real estate market. The collapse will
would have become more expensive as the
raise questions about both new and existing
project progressed, nothing to be
real estate assets. In the short term,
unexpected for constructing in Nigeria. The
structural integrity tests will become
question then remains – what compromises
commonplace and structural integrity will
were made? Since the collapse, the two
be given more emphasis in general. The
high-rise buildings adjacent to the collapsed
winners will be the construction businesses
21-story skyscraper have not been ordered
and developers already known for high-
demolished. While there have been other
quality, who will be able to charge more for
building collapses in Nigeria over the years,
the quality assurance they provide.
one in an exclusive neighbourhood as Ikoyi,

INVESTMENT
MARKETS
FIXED INCOME AND MONEY Maiduguri and Enugu-Port Harcourt roads,

MARKETS amongst others. Telecoms operator, MTN
Nigeria issued its N89.99Bn Series II 10-year
Nigeria's $4Bn bond issuance was 400% fixed-rate bond due in 2031. Coleman Wires
oversubscribed but generally considered and Cables, the largest cable manufacturer
expensive. Still, debt servicing in the context in West Africa signed a N50Bn bond with
of rising interest rates may be a severe issue the Securities and Exchange Commission
for the incoming administration in 2023. (SEC). Dangote Cement successfully issued
The Federal Government also raised its N50Bn Series 1 fixed rate senior
N360Bn in Sukuk bonds for the unsecured bonds under its new N300Bn
rehabilitation of the Ibadan-Ilorin, Kano- multi-instrument issuance programme.
Saving for a rainy day

Nigeria Pension Fund Assets as of 31st June 2016 – 2021 (N'M)
Source: PENCOM

ABSA Africa Financial Markets Index (max=100)
The Lagos Free Zone Company also food on the continent each year. A major
successfully issued a N10.5Bn corporate chunk of the funds will be used to build
infrastructure bond as part of its N50Bn warehouses. AFEX's fund would also
debt issuance programme. Commodities support the financing of 250,000 hectares
market participant, AFEX, announced the of land for commercial and smallholder
launch of The Food Security Fund, a new farming, beginning with 30,000 hectares in
$100M 10-year bond (FSF). The funding will Kano, Kaduna, Oyo, Ogun, Cross River, and
help to improve Africa's food security and the FCT and expanding to markets
produce three million metric tonnes (MT) of throughout East and West Africa
Nine months later

Select commercial banks 9M PAT 2019 – 2021 (N)
Source: PENCOM

EQUITIES
As of H1 2021, 10 stockbroking firms
received a total of $541Bn in fees and
“
2021 is a record year for
bond sales - over N2.6Trn
commission charges derived from share sold with most of the
volumes moved. Data obtained from the funding coming
Nigerian Exchange Group Limited (NGX) for from domestic investors
“
the first half of 2021 revealed that 39.34Bn
units worth $541.21Bn were traded.
Analysts report that sales proceeds from
GTBank and Zenith Bank found their way been driven by foreign investors. But this
into dual listings by SEPLAT and Airtel, being had begun to change since the lockdown
more liquid. Analysts suggest that there is effects of 2020. An estimated 71% of
little to no new money coming in from investments are now domestic and this
foreign investment houses. Pension Fund reproportioning is projected to continue in
Administrators have pretty much stayed on 2022. The FX environment suggests that
the sidelines, choosing rather to move their new money may not come in. The deficit
funds into commercial paper and fixed budget suggests more borrowing is likely
income instruments. 2021 is a record year and the authorities will shop for more funds,
for bond sales - over N2.6Trn sold with most heading into 2022. Still, analysts are
of the funding coming from domestic unanimous - without foreign money, the
investors. market will struggle
Historically, Nigeria's equities market has
No new money
NSE-ASI Returns (%)
Source: NSE

REAL ESTATE
SUMMARY
HOME COURT ADVANTAGE Security continues to be a priority in the

residential real estate market. This has
Local investors are stepping into the gaps fuelled demand for gated communities.
hitherto filled by foreign capital. UAC Abuja has seen demand for residential
Nigeria completed the unbundling of its assets increase because of its position as
equity stake in UPDC REIT by fully one of the more secure locations in the
distributing its shares to its stockholders. country. This demand has further driven the
Purple Urban Limited, completed its N5Bn rapid redevelopment of retail, hospitality
Sukuk Bond private placement. The Sukuk and residential assets. Residents report a
Bonds were issued to fund 94 out of 112 pace of commercial activity similar to Lagos
housing units in its urban residential in areas as Wuse, Gwarimpa, Jabi, Wuye,
development comprising mostly 4-bedroom Garki Area 1, Life camp, Kubwa and
semi-detached maisonettes and Katampe nodes.
penthouses, as well as 2, 3- and 4-bedroom
flats right off Freedom Way in Lekki Phase 1, Analysts report a 25 - 30% YoY price growth
Lagos. The bond was 100% subscribed. in gated communities with a few going as
Local market participants, from Persianas high as 70 - 80% driven by concerns around
and Ketron Investments to Purple have led future lockdowns and the added protection
the way in mobilising local investment in from vandalisations. This may exacerbate
Nigeria's real estate market. the current challenges in the high-end
markets where landlords struggle to fill up
“
space, retrofitting assets to better
accommodate short stay occupiers. But
management is increasingly challenging.
Abuja has seen demand
Then there are management processes
for residential assets
required to ensure that sustained tenancy
increase because of its payments are guaranteed. These require
position as one of the funding and as real estate professionals
more secure locations make more of a case for funding well-
in the country
“ conceptualised projects, Eurobonds and
private equity are showing themselves as
viable alternatives.

Staying in Nigeria's cities
Average rental prices (N000 per Anum)
Source: Northcourt
As part of its revenue drive, the Lagos State housing project in the Ikorodu division
government reviewed fees for property which consists of 40 blocks of one, two, and
regularisation from 25% to over 100% in three-bedroom apartments, each with a
some cases. Governor's consent fee is fixed fully equipped kitchen, storage, and guest
at 8% of the assessed value with Capital restrooms. Parking, a water treatment
Gains Tax and Stamp Duty at 2% apiece. plant, overhead water tanks and seven
Registration fees are now 3%. The transformers are also provided.
government also commissioned a 480-unit
The good thing about gates

Average Land Prices in Lagos gated communities N'000/sqm
Source: Northcourt
The COP26 conference on climate change adoption of PropTech, sustainable design

reviewed promises made by governments software or responsible sourcing of raw
around the world to tackle the global materials, building automation and energy
$16Trn real estate contribution to climate management systems are critical to moving
risk. Buildings account for an estimated the sustainability conversation forward.
30% of worldwide greenhouse gas
emissions and 40% of energy use. At the cost of $1Bn, Dangote Cement 6M
Constantly improving environmental MTPA plant in Okpella, Edo State, was
sustainability, an example being the completed and the firm teamed with

Madugu Cement and Sinoma International The Federal Government has also
Engineering Company Limited to build a commenced compensating Benue state
5MMT cement facility in the Kembu and communities affected by the Abuja-Keffi-
Kwali districts of Gombe state. This suggests Makurdi highway project.
that the benefits of investment in industrial
real estate may be expected in 2022. The As the nation moves into a pre-election year
North East Development Commission and we expect more liquidity in the real
delivered over 1,000 completed houses to estate market as is typical with the political
the Borno state government to resettle gerrymandering and its impact on the
more than 500 Internally Displaced Persons. market. This also means that flight to safety
relocations are likely to begin in Q2 of 2021.
The Construction industry faces regulatory scrutiny as real estate markets adjust
GDP Growth figures for Nigeria's economy, construction and real estate industries
Source: NBS
LAND
Land prices grew in almost all nodes
considered. Leading locations as Ikoyi traded
“
Land in gated communities
attract a premium for
well over the N500,000psm mark with plots the security benefits
in Banana Island reaching N1Mpsm, where
“
that they provide
available. Land in gated communities attract
a premium for the security benefits that they
provide. Prices in second tier cities as Benin, include Shoreline estate, Alaro city and Isimi
Abeokuta and Ibadan are also projected to Lagos. Seamless land transactions are a
spike over the next few years. Prime new priority of the central government as
town locations attracted more investment, regulators partner with the private sector to
much of which was local – Eko Atlantic remove impediments. And as the nation
(Oxygen and Periwinkle residencies) and moves closer to the 2023 election cycle,
Orange Island, Lagos. Other new towns land prices are projected to grow.

Lagos Average Land prices
2019-2020
Location 2017 Average 2018 Average 2019 Average 2020 Average 2021 Average % Change
(N)
Old Ikoyi N435,000 N363,000 N436,667 N 415,000 N550,000 33
Lekki Phase 1 N140,000 N196,000 N184,361 N 198,000 N322,000 63
Victoria Island N312,000 N300,000 N351,912 N 330,000 N398,000 21
Sangotedo N26,000 N28,000 N30,596 N 27,750 N42,000 51
Agungi N84,000 N95,000 N108,757 N 105,364 N170,000 61

Abraham
N34,000 N24,000 N36,000 N 38,690 N50,000 29
Adesanya
Magodo N86,000 N110,000 N116,747 N 97,110 N144,000 48
Ikeja GRA N260,000 N261,000 N262,945 N 295,829 N360,000 22
Source: Northcourt
INFRASTRUCTURE flagship projects, the Federal Government

established the Presidential Infrastructure
The most recent Africa Infrastructure Development Fund (PIDF). Egbin Power Plc
Development Index (2020) placed Nigeria is concluding plans to invest $2Bn in a plant
24th on its ranking of African nations. expansion. This is in addition to $1Bn
Estimates suggest that Nigeria's already invested after the plant was
infrastructure deficit will require $15Bn privatised back in 2013.
annually over the next five years. And in
2021, the Nigerian government may have Discontinuing projects from previous
attempted an appropriate response. The administrations has been one of the many
2021 appropriation bill allotted $4.37Trn leakages in Nigeria's infrastructure
for capital expenditures, or 32.2% of the framework. Work continued on the
overall budget with progress on its $62.7Bn Kano-Gwarzo-Dayi federal
transportation, power and energy, housing highway project and completion is expected
and agricultural projects in all six geo- in December 2022. The 83Km highway will
political zones. 24 states have offered include three bridges from Kano to Diya in
approximately 2,000ha of titled land under Katsina State. The FEC authorised a contract
the federal government's social housing with Dangote Industries for the
initiative. construction of five highways totalling
274.9Km and costing N309.9Bn. It also
The Lagos-Ibadan railway project was also approved $11.17Bn to build a standard-
inaugurated and the central government gauge coastal railway between Lagos and
has allocated $280M to the $1.2Bn Kaduna- Calabar and the construction of two
Kano rail project. In total, the Lagos-Ibadan electricity substations in Jigawa and Akwa
expressway, 2nd Niger bridge, and Abuja- Ibom states at N6.2Bn and N2.31Bn,
Kaduna-Zaria-Kano highway have all respectively.
received $1Bn. The 14Km Ijebu Ode-Epe
Expressway has been rebuilt. To fund three

“
The FEC authorised a contract
with Dangote Industries for
however a penalty if the agreement was not
met – and when the agreed time elapsed,
the penalty clause amounting to about
$500M came into effect.
the construction of five
highways totalling 274.9Km The NNPC bought a 20% minority stake in
and costing N309.9Bn
“ the Dangote refinery for $2.76Bn and
partnered with the China Machinery
Engineering Corporation and General
Electric to supply 50MW of electricity to
On the contested Mambilla HEP project in Borno State. Leading manufacturer,
Taraba state, Sunrise Power Transmission Mangal Industries partnered with the China
Company of Nigeria Ltd (SPTCL) has agreed National Materials Group for the
to waive a $500M penalty imposed on the development of a 3MMT pa cement factory
FG over multiple defaults of a $200M and a $600M 50MW captive power plant in
settlement agreement. SPTCL was awarded Kogi state by 2024. To enhance its data
the contract for the 3,050MW Mambilla centre capacity and simplify the
HEP Project in 2003. In October 2017, the development of fibre optic cable across
company sued the Nigerian government for Africa, the IFC partnered with Liquid
$2.35Bn at the ICC International Court of Intelligent Technologies and will be
Arbitration, after the FG replaced the firm investing $250M in its data centre growth
with a Chinese consortium. To resolve the plans in Nigeria, Egypt, Kenya, and South
situation, the FG agreed to pay SPTCL Africa. The firm is also expanding into
$200M within 14 days after signing the healthcare real estate, student housing, and
agreement on January 21, 2020. There was cloud storage infrastructure.

Africa Data Centres is constructing a facility interconnection is still a top focus for the
that will include 6 data halls with 6000m2 of corporation, it will be added to its existing
white space, 3 data centres in Lagos, in the data centre network in Johannesburg,
Eko Atlantic City Special Economic Zone, Nairobi, Cape Town, Harare, and Kigali.
and interconnection to all Africa Data
Centres' sites across the continent once Rack Centre, West Africa's leading data
completed. Critical HVAC, power, and centre colocation provider, has completed
building systems are handled and the doubling of its IT load capacity to 1.5
monitored 24 hours a day, seven days a MW at its Lagos site, providing an additional
week. The Lagos facility is a big step forward 600sqm of data centre white space to cloud
in Africa Data Centres' long-term plan to providers and enterprise customers.
digitise the continent. The data centre With over 40 Internet Service Providers and
would serve as the West African hub for a broad Cloud marketplace, the facility
Africa Data Centres. Because
offers a comprehensive carrier neutral track record since inception.

ecosystem. It serves the rising need for
proven dependable hosting, flexible As a result of the collaboration between
interconnection, and enabling cloud providers and businesses, these data
organisations to advance their digital centres have become ecosystem
transformation as a critical Tier III marketplaces – and, more crucially, the
Constructed Facility Certified hosting foundation for the country's digital and
location for the Internet Exchange Point of economic development. Another important
Nigeria. The expansion is the first stage of a factor driving demand for local data centre
process to add 13MW of IT load capacity infrastructure is the need to keep African
available for operation in 2022 at the same data in Africa.
site in Lagos, Nigeria, with a 100% uptime

RESIDENTIAL Gated estates are typically made up of high-
value residences and are intended for the
Gated estates have continued to solidify affluent. Golf courses, community centres,
their position as the leading residential and sports facilities are common amenities in
development model. The high fences, gated estates. These further justify the
restricted entry and exit points make for market prices charged per housing unit or
much needed security assurances in land plot. Investors require more from real
Nigeria's leading cities, socially as tensions estate projects and are looking to increase
warm leading up to the elections. the sustainability features in their portfolios.
Cities within cities

Average 3-Bed Rent in Lagos Gated Communities - N'M per anum
Source: Northcourt
Studies show that there are three main sub- total number of estates at the Lekki-Epe Lagos
sets: lifestyle communities are gated corridor at 82 having 13,239 residences.
communities that emphasise recreation and
provide a safe and secure location for golf But the housing challenges persist – and are
courses and retirement villages. Prestige on the increase going by demographic
Communities place a premium on social indices. The federal government intends to
prestige over lifestyle. The desire for image, create a national housing bond to assist
privacy, and control are key objectives. housing developers in obtaining finance
Security communities are gated through public-private partnerships. So far,
communities that prioritise security over 7,315 applications have been received for
social status and lifestyle. Estimates put the 5,000 national housing units on offer by the FG.
All the way up

Growth in capital prices for 4 Bedroom apartments in Lagos (N'M)
Source: Northcourt

In a bid to resolve the housing challenges, a
few developers have adopted a build first
and ask questions later approach. This
“
Some studies show that
single-family houses in loud
naturally led to regulatory contraventions. areas sold at a discount of
As such, the Lagos State Building Control up to 30% when compared
Agency had to seal a few residential and
to more quiet houses
“
commercial buildings on the Lekki Phase 1
axis for illegal extension of development.
Money well spent

Average 4-bed sale prices in Lagos gated communities - N'M
Source: Northcourt
Noise pollution in residential areas, affected. Neighbourhoods with high noise

especially in emerging markets is caused by pollution may be rated as undesirable
unstructured informal sector activities such residential locations for long term property
as road traffic, religious activities, power investment due to property value loss. As
generation and ubiquitous conflicting space such, reducing noise pollution in residential
uses. Studies on the impact of noise on areas benefits both the asset, its owners
residential property values in eastern and occupiers. Some studies show that
Nigerian cities conclude that residential single-family houses in loud areas sold at a
units plagued by noise pollution have a discount of up to 30% when compared to
3.1% lower rental value than those not so more quiet houses.
Placing a value on peace and quiet

Effects of noise pollution on residential property values in Enugu state
Source: Idu, Uchegbu, Ubani, and Akalemeaku (2021)

As a way forward, analysts suggest a noise This may already be factored into the house
tax on local government areas which would prices in high-end locations. There is a case
then be used to provide social services for for noise barrier walls that boost home
the underserved communities. Others prices by 15.24% within a 300m radius.
suggest that individuals may be willing to Others argue that real estate prices
pay for a noise policy that prevents decreased by 0.4% per dBA for low noise
occupiers from going over a decibel level. locations and 9.6% for high noise areas.
The speed of sound

Average noise levels for residential apartments in Enugu nodes (dBA)
Source: Idu, Uchegbu, Ubani, and Akalemeaku (2021)
Border towns have also seen a value the two border communities, the
growth. Researchers conclude that growth differences in rental value across the types
in property values in the Joke-Ayo town, of residential properties in the two
Lagos state have led to the growth in Akeja communities show that different sets of
community, Ogun state. This is attributable factors have a much greater impact on
to a variation in the number of houses rental values in Joke-Ayo than on similar
counted within a 1Km radius of each town. properties in Akeja. The data implies that
Joke-Ayo is a growing sub-urban precinct migration from Lagos to the border areas is
with mean rental values suggesting that a significant factor influencing the rental
residential rentals assets grew over the six- value of residential properties in the Akeja
year period. Still, despite the proximity of area.
How does Lagos state influence the house prices of Ogun state?
Average residential rental values in Joke-Ayo, Lagos & Akeja, Ogun state communities (N'000)
Source: Journal of South African Business Research

Leasing, outside Lagos
Average lease prices in select states (N'000)
Source: Northcourt
A review of the relationship between neighbourhood density, housing quality,

residential property rental values in both administrative quality and level of economic
border towns shows a discrepancy in the development.
amount of infrastructure development,
Where the heart is

Lagos vacancy rates (%)
Source: Northcourt

Buying a house
Average sale prices for residential apartments in select states (N'M)
Source: Northcourt
This further contributes to the disparity in

rental values as well as the pattern of rental
growth which indicates the potential of the
Ogun state towns that border Lagos State's
Researchers conclude that
growth in property values
“
property market. The Borno state in the Joke-Ayo town,
government in partnership with Family Lagos state have led to
Homes Funds Limited commissioned 300 the growth in Akeja
semi-detached two-bedroom housing units community, Ogun state “
developed for low-income earners.
As the capital becomes more commercial

Abuja vacancy rates (%)
60%
50%
40%
30% 28%
25%
20%
13% 13%
10%
10% 8%
4% 4% 5% 4% 4% 5%
3% 2% 3%
0%
0%
Maitama Apo Jabi Lugbe Wuse 2 Gwarinpa Katampe Utako
H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H1 2020 H2 2020 H1 2021 H2 2021
Source: Northcourt

Changes in the Garden city
Residential Vacancy Rates for Port Harcourt (%)
Source: Northcourt
Brick by brick
Building Materials Prices (N)
Source: Castles, Northcourt

OFFICE apparent that remote working, the
acceleration of online purchasing, as well as
PwC announced that 40,000 of its other pandemic-era behaviours, will persist,
employees in the United States will be able at least in part, affecting land uses and
to work online and live anywhere they want location. There has also been a shift in
– indefinitely, making it one of the largest locations as workers can choose to work
employers to embrace permanent remote from anywhere in the world. Time will tell if
work. While employers have varied migration and space use patterns persist.
approaches, with IT companies preferring a
more flexible approach and financial
institutions preferring more traditional
working arrangements it is likely that office
“
The continued decline in
demand for grade A office
sharing arrangements are more likely than a
demand for new office space. space has accelerated the
demand trend for B+ offices
With a staggered return to the office, over and residential conversions
“
30% of workers on average will require
space reconfiguration to accommodate
declining demand. One of the most
significant lessons acquired during the Property owners and managers must be
pandemic is the value of more adaptable, adaptable to changes in the desired use and
flexible, and sharable spaces. It seems placement of space driven by demand.
Working in style
Average grade A rents, annual ($'psm)
Source: Northcourt
The continued decline in demand for grade blueprint strategy for recovery. In the short
A office space has accelerated the demand term, weaker organisations will try to revert
trend for B+ offices and residential to pre-pandemic paradigms. Others may copy
conversions. As every organisation entered the decisions made by those who most closely
the pandemic with distinct strengths and resemble them. More attuned organisations
vulnerabilities, there is no pre-packaged will make the right adjustments.

“
One of the most
significant lessons investment portfolios continues to fall.
acquired during the As each variant of the COVID virus shows
pandemic is the value of up, companies continue to revise work
more adaptable, flexible, methods learning from the mostly
and sharable spaces
“ successful trial of mass remote working
during lockdowns in 2020.
While some employers insist on a complete

return to the office, others prefer hybrid or
even entirely remote employment.
It may also be useful to use a linear scale Companies are maintaining social
which may have permanently remote distancing, reversing a decade-long trend of
employees on one end and permanently pursuing greater space efficiency. Individual
office-based employees on the other. From company preferences will ultimately differ
an investment perspective, the office isn't based on location, nature of work, ability to
dead – however, its percentage of many share desks, and corporate finances.

COWORKING accelerate. Companies that use hybrid work
arrangements will increasingly rely on
Despite the pandemic, coworking spaces coworking facilities. Employers also face a
have proven to be durable, as the industry difficult problem in attracting people back to
adjusts and caters to the new remote work work, or at the very least out of their homes as
trend. Some, in partnership corporate the lockdowns bring the necessity of such
clients will be expanding. A few activities into question. Leading startup
corporations were already implementing accelerator and coworking space services
coworking and other flexible workspace provider, Ventures Platform's moved to its
options into their corporate real estate 2,000sqm hub is located in Wuse II, Abuja,
strategy prior to the outbreak. This will and can house more than 200 individuals.
Working it out
Global coworking space market ($'Bn)
Source: Northcourt
Analysts suggest that while workers seek a

workplace that isn't their home, demand for
near-to-home suburban office locations is
increasing. Many employees are still willing
to go to work. They simply aren't as willing
to commute as they formerly were. This is
why, by moving the office closer to its
employees, suburban office locations and
coworking spaces will become crucial. As
more landlords adjust to the flexible lease
environment, coworking operators will face
more competition in 2022. Rather than
partnering with coworking spaces, many
landlords and real estate investment firms
are increasingly seeing the possibility to
build their own flexible space options that
eliminate the middlemen. At a time when
demand from traditional corporate clients in
city centres is declining, landlords are
providing flexible offices.

INDUSTRIAL challenges as the nature of data centres and
their locations evolve. But mechanisms that
In 2020, global industrial sales fell slightly to make it easier for real estate investors to
$178.2Bn, mostly due to an 11.7% decline enter the sector are popping up, too,
in the US to $108.9Bn. EMEA investments according to one large data centre investor.
rose 17% to $48Bn. Despite strong market Occupier demand for industrial space has
fundamentals, growing competition will risen every quarter since Q3 2020 – from
drive existing and new investments to renovations, conversations or in some
emerging markets and lower-quality instances, new builds.
buildings in core cities. The sector is facing
Production complications
Purchasing Managers' Index 2017 - 2021
Source: Northcourt
Container volumes have climbed by an mismanagement of empty containers by

average of 23% yearly over the last five years, shipping companies and terminals, non-
according to data from Nigeria's largest refund of container deposits, and a lack of
container terminal, APM Terminals Apapa, adequate container holding bays by shipping
Lagos. Since 2006, the company has handled companies. A few solutions may be on the
8.13M TEUs of containers, and more than horizon, one being the 4FOLD foldable
650,000 TEUs are expected in 2020 and 2021 container designed by Dutch firm, Holland
with the majority being imports. With Container Innovations (HCI) which takes up
approximately 200M empty containers only 25% of its original size in storage.
moving across the world for international Nigerian ports are not only constrained by
trade via ships, some ports have become space, but also by difficulties such as process
overburdened by the imbalance of shipping harmonisation, governance and operator
containers, as a result of a shortage of exports non-compliance. Local arm of Danish shipper,
and port access issues in many nations. These Maersk had 12,000 containers held in
containers also pose sustainability risks, holding bays across the country, with little
resulting in CO2 emissions. Empty containers chance of returning to their required
are at the heart of some of Nigeria's biggest destinations in China. Between Q1 and Q3
port challenges, including space constraints 2021, the company lost 3,000 containers
as a result of seaport concessions, (each valued between $7,000 and $14,000).

Across the seas
Liner shipping connectivity index – Quarterly Growth rates
Source: UN
During the Q3 of 2021, economic activity in lack of raw materials. Metal components
Sub-Saharan Africa slowed as a wave of the such as steel and aluminium, as well as
COVID-19 Delta variant caused increased timber, packaging, and electricals, were
lockdown measures, a decrease in demand, among the items listed in short supply in
and general supply chain disruptions. The 2021, with all of them experiencing record
region also experienced supply chain global supply shortages. The Nigerian Ports
disruptions, which not only slowed Authority (NPA) intends to create a fully
production but also resulted in even higher digital ecosystem at all of Nigeria's port
prices and output charges. locations by 2025. The goal is to encourage
smart port transformation, with an
However, when tougher lockdown rules emphasis on paperless, time and cost-
appeared to be successful in limiting the effective port operations.
spread of the virus, the relaxing of controls
resulted in a minor recovery in demand near
“
the end of the quarter, boosting business
confidence to its highest level in 19 months
in September. When compared to other
Nigerian ports are not
leading countries in SSA, Nigeria drove
only constrained by
much of the upturn as demand for goods
and services remained robust and all broad
space, but also by
sectors experienced development.
difficulties such as
process harmonisation,
Nigeria also had the fastest increase in governance and
manufacturing-driven employment and operator non-compliance
“
increased output charges. Businesses in
Sub-Saharan Africa have also reported
difficulties processing new orders due to a

Riding the third wave
Average industrial rents for African countries, annual ($'psm)
Source: Northcourt
The medical supply chain is hampered by the medical distribution across the continent,
absence of medical grade warehousing, combined with exclusivity agreements
poor inventory management, ineffective between distributors and suppliers, makes
distribution networks, and insufficient breaking into the Nigeria market as a new
funding. Primary health-care facilities private distributor difficult. Nigeria, for
frequently lack basic medications, and the example, has over 205,000 drug retail
majority of medical devices sent to the outlets, with major pharmaceutical
continent by the international community companies covering only a small section of
go unused due to a lack of infrastructure the supply chains. Warehousing developers
constraints, such as intermittent internet are concluding plans to upgrade existing
access and unreliable electricity in rural warehouses and will be introducing space in
areas. excess of 150,000sqm into the Nigeria real
estate market in 2022.
And the inefficiencies persist. Unconsolidated

HOSPITALITY critical need of maintaining supply chains
closer to home for some national
The hospitality sector faces a few businesses. Nigeria's hospitality industry is
challenges. Globalisation is slowing, as adjusting to pandemic imposed changes. As
supply networks become more localised, a result of rising food and commodity prices,
increasing labour costs. The recent wage costs, and labour shortages, we
pandemic, combined with geopolitical anticipate that prices will increase directly.
circumstances, has demonstrated the
Chauffeurs and chandeliers

Number of pipeline hotel rooms
Source: W-Hospitality Group
Hotel projects by Tiloc Nigeria Limited, De These developments are estimated at

Santiago Milan Hotel & Suites Limited (Both N2.5Bn, N1.4Bn and N1.1Bn respectively.
in Lagos) Wintess Garden (Hotels and Suites)
Limited - Anambra state were granted Pioneer The pandemic has altered business travel.
Status Incentives; 5 year tax exemptions for Online meeting platforms has made travel
new investments into Nigeria's economy. less central by allowing remote work.
All of the nights

Hotel room revenue in Nigeria from 2013 - 2023 ($'M)
Source: Statista

“
The recent pandemic,
combined with We anticipate more extended travels in the
geopolitical future with leisure surpassing business.
circumstances, has There are numerous reasons to be hopeful
demonstrated the for the future. Hotel development is a long-
critical need of term project, and we know there will be a
maintaining supply time when demand rises again,
chains closer to necessitating the construction of new
home for some hotels. The presence of international chains
“
national businesses and pipeline projects in Nigeria typically
have a positive impact on the hospitality
industry as a whole.
Flags and banners

2021 - 2022 Africa Hotel Development Pipelines: Top 10 brands
Source: W-Hospitality Group

RETAIL shopping centre in Benin City. Restaurant
group Eat n' Go Limited, leading franchisee
Market corrections are the order of the day for the Domino's Pizza, Cold Stone Creamery,
in the retail real estate market. Local and Pinkberry Gourmet Frozen Yoghurt
retailers are taking up positions, going as far announced that it has invested over $5M in
as buying out international investors as local Ogun state by constructing warehouses,
investment, egged on by local demand, is commissaries, and other outlets.
searching for dollar investment a less
attractive proposition. The Edo State Global luxury business lifestyle brand,
Government entered an agreement with Montblanc has expanded its presence into the
Persianas Nigeria Limited for the Nigerian market, opening its first West African
development and construction of a modern boutique store in the Lekki axis of the state.
Food, clothing and shelf space

Vacancy rates for grade A malls in Lagos (%)
Source: Northcourt
A more open trade regime is needed to committed to implementing the agreement

promote the growth potential brought by and are working to enhance trade
the African Continental Free Trade facilitation through the increased use of
Agreement (AfCFTA). The authorities are technology.

Nigeria's trade regime continues to be trade logistics. Building on current efforts to
protectionist and restrictive with key items improve port infrastructure and reduce the
prohibited from FX access for imports, burden of customs administration, it may be
including necessities and food items, high wise to reduce barriers to trade and reliance
tariff and non-tariff barriers, and difficult on import substitution.
Local retailers move into position

Number of stores nationwide
Source: Northcourt

Ecommerce has continued to spur the
Massmart is selling all of its Game store growing class of real estate created because
outlets in West and East Africa as the parent consumers can now order good quality food
company, Walmart assesses its African from their phones. It is not entirely a net
portfolio. As with its counterpart - Shoprite gain for the real estate industry as it is still
Holdings' excursions into Nigeria have been hard to quantify. Inevitably, orders fulfilled
hampered by currency volatility and limiting by dark kitchens may begin to cannibalise
customer demand, making it difficult to business from traditional restaurants,
operate economically on a continent that especially as logistics efficiencies improve.
was once hailed as the next big growth But the sector is set for rapid growth as
market for retailers. Euromonitor has predicted it could become
a $1Trn industry by 2030 globally.
Shopping for the holidays

Vacancy rates for grade A malls in Port Harcourt (%)
Source: Northcourt
But the rising operating costs force

restaurants to find new efficiencies.
Globally, the National Restaurant
Association, estimate that 91% of
“
A more open trade regime
is needed to promote the
restaurants paid more for food this year, growth potential brought
84% paid more for labour and 63% paid by the African Continental
more for real estate. As the already-thin Free Trade Agreement
margins of their industry grew thinner, (AfCFTA) “
restaurant owners pivoted to stay
profitable. Before the pandemic, online
ordering was a secondary source of
several important trends are emerging.
revenue. During the pandemic, it was the
Weekends have long been the main days for
only source of revenue as lockdowns meant
online ordering. That's still the case, but the
that only critical services providers could
gap between weekends and weekdays
move. As it settles into its future role —
reduced in 2021. Online ordering has become
somewhere between those previous two —
a routine part of everyday life.

HEALTHCARE country. The ePharmacy seeks to create a
user-friendly, all-inclusive online experience
In August 2021, Nigeria, like much of the that allows users to receive expert health
rest of Sub-Saharan Africa (SSA), care services from any device. In
experienced a third wave of the pandemic. collaboration with healthcare providers
Proactive measures taken by the authorities, such as MeCure, HealthPlus ePharmacy
including a robust infection surveillance provides a holistic experience for health care
system and a national strategy for vaccine services such as telemedicine and laboratory
procurement and implementation, have testing. The Duchess International Hospital,
helped keep infection rates and mortality a purpose-built 100-bed, hospital facility in
lower than in many other countries. Ikeja GRA, Lagos opened, delivering
HealthPlus has launched its first-ever primary, secondary, and tertiary healthcare
ePharmacy, which will provide Nigerians services across a range of specialised and
with faster access to the greatest sub-speciality fields.
pharmaceutical treatment available in the
Where the heart is

National Healthcare Budget - Capex (N'Bn)
Source: FMH
An efficient hospital emergency response in were substantial gaps in logistics and

the face of the COVID-19 pandemic should supplies, and few had strategies for critical
be able to maintain all necessary health care of COVID-19 patients. Many hospitals
services, extend hospital facilities and questioned said they didn't have or didn't
resources to accommodate a surge of have enough key goods to respond
severe and critical COVID-19 cases, and aggressively to COVID-19. Many hospitals
offer a safe and inspiring environment for claimed that they lacked a sufficient supply
employees. A large proportion of hospitals of full PPE and surgical masks for their
cut non-essential health services. There employees.

The doctor will see you now
Compliance with WHO COVID-19 readiness checklist among select hospitals in Nigeria (%)
Full names of hospitals:

Usman Danfodio University Teaching Hospital (UDTH), Sokoto, Delta State University Teaching Hospital, Delta (DELSUTH), Federal Medical Centre Abeokuta,
Ogun State (FMCA), Aminu Kano Teaching Hospital, Kano (AKTH), Niger Delta University Teaching Hospital, Bayelsa (NDUTH), Central Hospital, Warri, Delta
(CHW), Abubakar Tafewa Balewa University Teaching Hospital, Bauchi (ATBUTH), University of Port Harcourt Teaching Hospital, Rivers (UPTH), University of
Abuja Teaching Hospital, FCT (UATH), Federal Medical Centre Birnin Kebbi (FMCBK), General Hospital Gusau, Zamfara (GHG), Ahmed Sani Yariman Bakura
Specialist Hospital, Zamfara (ASYBSH), University College Hospital Ibadan, Oyo (UCH), University of Maiduguri Teaching Hospital, Borno (UMTH), University of
Nigeria Teaching Hospital, Enugu (UNTH), Alex Ekwueme Fed. University Teaching Hospital, Ebonyi (AEFUTH), Irrua Specialist Teaching Hospital, Edo (ISTH),
Enugu State University Teaching Hospital, Enugu (ESUTH), Federal Medical Centre Yenagoa, Bayelsa (FMCY), General Hospital, Minna, Niger State.
Source: 2021 Ogoina et al
The Duchess
International Hospital,
“
a purpose-built 100-bed,
hospital facility in Ikeja
GRA, Lagos opened,
delivering primary,
secondary, and tertiary
healthcare services
across a range of
specialised and
sub-speciality fields “

The pandemic resulted in certain between institutions and a general lack of
improvements in hospital infrastructure, readiness in terms of surge capacity, critical
particularly among those that constructed care, human resources, staff welfare, and
isolation units and purchased ventilators. crucial item availability for COVID-19
The WHO examined the readiness status of response. While progress is being made,
48 African nations to respond to COVID-19 long-term solutions are needed to address
at the start of the pandemic, finding that issues such as the management of severe
16.7% had acceptable readiness, 68.8% and critical cases in health care facilities, the
had moderate readiness, and 14.6% had construction of well-equipped ICUs in all
limited readiness. Nigeria was adjudged to states of the federation, the provision of
be moderately prepared. Nigeria's medical adequate PPEs for HCWs, and attention to
system was not effectively prepared for the staff welfare and safety.
COVID-19 pandemic, with disparities
Ready player one

Availability of critical items for WHO COVID-19 response in Nigerian hospitals (%)
Source: 2021 Ogoina et al
With increased food insecurity and an population has been fully immunised. Work
increase in already-high levels of poverty, on a 14-bed clinic that will be added to the
the pandemic's economic and social effects Nigerian president's Statehouse in Abuja
have become more apparent. There has began in November. The 2,700sqm, $50M
been significant progress in the project will be finished by the end of 2022
procurement of vaccines. However, due to a and will have two surgical rooms, a
lack of vaccine supplies, distribution laboratory, a pharmacy, and an x-ray unit.
bottlenecks, and high vaccination This project is considered inflated as N1.9Bn
reluctance, only about 3% of the eligible was spent between 2019 and 2021.

STUDENT HOUSING and insufficient student housing in
educational institutions. Studentification -
The demand for PBSA (Purpose Built Student the process by which specific
Accommodation) remains large. And the neighbourhoods become dominated by
private sector may be waking up to the student residential occupation is starting to
opportunity for investment. There are show up in Nigeria, with some ramifications
currently 170 universities in the country - 43 for the neighbouring community. Business
federal universities, 48 state universities, 79 patronage, noise pollution and shoplifting
private universities, 17 federal and 26 state- are among them. Added to these are the
owned polytechnics, 17 federal and 26 state- results from a recent survey suggesting that
owned polytechnics. According to estimates, capital (79.10%), lack of long-term funding
the overall number of students enrolled in (75.10%), corruption (72.60%), insecurity
Nigeria's tertiary education system exceeds (49.40%), and resistance to change
2M, with roughly 750,000 slots available (55.70%) are among the challenges facing
each year. The projected annual growth rate public-private partnerships attempting to
is 12%. The expansion of off-campus private execute hostel accommodations projects.
student housing in Nigeria is due to this
increase in enrolment in higher education Private equity-backed fund, Greenage
“
Development Managers raised capital for its
hostel projects by implementing the EDGE
sustainability framework. They've
...the overall number of
established a $150M sustainable housing
students enrolled in
fund to support the construction of 100,000
Nigeria's tertiary bed spaces around the country over the
education system exceeds next ten years. Greenage typically obtains
2M, with roughly 750,000 funding through strategic partnerships to
slots available each year
“ build, run, and maintain the hostels at a low
cost to students.

Interested tertiary institutions offer land, PROPTECH
and Greenage obtains funding through
strategic partnerships to build, operate, and
maintain the hostels at low costs to the
students. The cost of the first phase is put at
$50M. At the Veritas University, a Catholic
university in Abuja, the firm broke ground
for the creation of a 500 - 1,000 room
hostel. Studies further suggest that
investing in a self-contained unit is the least
risky, followed by a one-bedroom flat and a
three-bedroom flat. The majority of This year, the world's first digital NFT - Mars
students would prefer a room with a private House, sold for $500,000. No-Fee Tokens
toilet, bath, and kitchenette. Self-contained (NFTs) are digital commodities or assets that
apartments have the greatest profitability are unique and non-interchangeable units
rating, followed by one-bedroom flats and of data stored on a blockchain. NFTs are
single rooms, according to the study. typically associated with reproducible digital
files such as photos, videos, and audio. In
Family Homes Funds Limited (FHFL) and the
effect, NFTs allow you own a piece of the
Agence Française de Développement (AFD)
Internet. Open sea and Rariable are two
will be collaborating on a detailed study
popular NFT markets for creating, buying,
ahead of a significant investment in student
and selling digital assets. NFTs gain value by
accommodation across the country through
being scarce. Unlike fungible
the Rental Housing Fund (RHF). Family
cryptocurrencies like bitcoin and Ethereum,
Homes Fund plans to increase the
NTFs are one-of-a-kind and indivisible. The
availability of affordable accommodation
market for NFTs continues to grow as entry is
for students by developing 20,000 beds
made easier and more transparent. The
over the next five years as part of the
underlying real estate assets allow investors
agreement. Pan-African education group,
to receive annual income or capital gains.
Honoris United Universities acquired Nile
Decentraland currently offers over 90,000
university for an undisclosed amount. The
virtual parcels of land and is a growing market
group has universities in Tunisia, Morocco,
for investors interested in digital land.
Mauritius, South Africa, Zimbabwe, and
Zambia, and is mainly owned by private A confluence of increased demand for data
equity group Actis. Nile University has analytics, the belief that more efficient
approximately 3,500 students who pay an offices or energy systems could tempt
average of N2.4M annually in tuition fees. workers back to the office, and the desire to
Honoris plans to expand the university's save money while bolstering sustainability
113Ha campus and grow its student pool to credentials resulted in investment in
10,000 in six years. Guaranty Trust Bank proptech which saw an unprecedented
completed its eight-story training facility $9.5Bn investment. Nigerian proptech
with 105-ensuite residential rooms, six startups attracted international interest to
lecture halls, two fully equipped libraries, an record levels. This is due to the appealing
amphitheatre and a banking hall. nature of investing in Africa's technology

environment. Edenlife, a proptech firm that accelerator, MetaProp also brought data
delivers meals, laundry, and cleaning platform - Estate Intel into the MetaProp
services to busy professionals, launched in accelerator programme. Spleet, a rental
2019 after raising $600,000 pre-seed marketplace and rent finance platform that
money. The firm secured $1.4M in venture provides flexible rental payment options in
funding in October 2021 to expand its Lagos, will get a $250,000 investment from
market share. Rent Small Small, a Nigerian Metaprop to accelerate growth and expand
property technology startup reorganising into various locations across Africa.
the Nigerian home renting market, has been
accepted into the Techstars Toronto Platform Capital invested $100,000 in
Accelerator Program. The startup has Yahshud property. The startup aims to
offered over 12,000 monthly stays in 18 lower the barriers to entry into real estate by
sites across Lagos State. A $250,000 allowing retail investors to add real estate to
investment from leading proptech their portfolio to address Africa's housing
needs. Seso Global, a Nigerian proptech
“
firm, has raised a US$600,000 pre-seed
fundraising round to better allow property
developers, agents, and governments to
NFTs gain value by being manage their transactions on a secure
scarce. Unlike fungible blockchain database. Metro Africa Xpress
cryptocurrencies like bitcoin raised $31M in series B funding to expand
and Ethereum, NTFs are into Egypt and Ghana and Treepz, a mobility
one-of-a-kind and indivisible
“ platform focused on digitising Africa's
transportation sector, closed a $2.8M seed
round.
PRIVATE EQUITY/VENTURE innovation hampered venture capital

CAPITAL investments in Nigeria's real estate markets.
Private equity ventures' choice of partners,
As of Q3 2021, research houses concluded regulatory restrictions, and post-
that Nigeria was the most funded market implementation challenges remain
for the year, with Kenya and Egypt significant success factors.
following closely behind. Over 60% of total
equity funding for African businesses was In most submarkets, the pandemic has
provided by these three. Fintech, Agritech, continued to disrupt investment
enterprise, off grid-technology (energy and performance, with uneven outcomes. Some
resources), healthtech, and e-commerce are sub-markets, on the other hand, have
the six technology verticals mentioned. The weathered the storm and attracted
industry received about $100M in investment. Increased demand for internet
investment flows, accounting for almost infrastructure drew investment in the
76% of overall equity capital in Africa. High telecoms sector. The Emerging Africa
borrowing rates, a lack of collateral, Infrastructure Fund (EAIF) invested $50M
insufficient records, and a lack of financial into an $800M bond issued by HIS – a

leading Nigerian telecommunications tower Finance, Budget, and National Planning for
company. The EAIF and the International the Homes Loan Assistance Program.
Finance Corporation were the bond issue's Standard Bank Group also completed a
anchor investors. $111M green loan refinancing for two Actis
assets: Heritage Place in Lagos and Jabi Lake
The African Development Bank has Mall in Abuja, at $58M and $53M,
authorised a $60M loan to the Family respectively.
Homes Funds and the Federal Ministry of

2022 OUTLOOK
ECONOMY position. Short stay apartments still have

critical acclaim – commercial success
The IMF projects that Nigeria's economy will however will increasingly depend on
grow by 2.7% in 2022 and remain at this location, management quality, COVID-19
level over the medium term, allowing GDP compliance (a core requirement for
per capita to stabilize at current levels, internationals). Developers will attempt to
notwithstanding long-standing structural adopt the highest standards for their
problems and elevated uncertainties. projects. Economic challenges will
Growth in the value of real estate stock in determine for how long. Still, a pre-election
both absolute and relative terms is an year will usher in heavy spending on assets
important consideration for global real in the real estate market. Some deals will
estate investors. An understanding of close for sums well above the asking (and
market scale and growth potential helps market) prices. Yet a few will close for
inform investment decision making and undisclosed amounts.
portfolio construction. Analysts estimate
that at the end of 2021, the global value of
real estate investable stock will be over HOSPITALITY
$34Trn, and expect this to grow to $85.1Trn
over the next 20 years. Core cities are set to Working remotely is now routine for many
grow and will remain dominant features of employees and is predicted to become a
the investment landscape – most notably, permanent trend. Due to the pandemic, an
Lagos where growth is expected in most unprecedented number of high-profile
submarkets except for Grade A office which organisations have indicated that they will
will continue to correct. embrace a hybrid or flexible approach. The
percentage of permanent remote workers
was predicted to increase by 2022. This
RESIDENTIAL means that leisure visitors and residents
seeking a change of scenery are using
The residential real estate market will
hospitality establishments as temporary
continue along most of the lines established
offices. This is an opportunity for hotels and
at the start of the year. Fewer rooms in city
restaurants to capitalise on and alter their
centres will be in demand and 4 to 5
offerings to fit the needs and wishes of this
bedrooms settle into the WFH de facto
rising sector.

What the future holds
Most likely challenges of the hospitality industry for the next 12 months
Source: Hospitality Insights
Sector traffic recovery index

2021 compared to 2019: Global online traffic to top domains in each sector, Desktop and Mobile (%)
Source: SimilarWeb, does not include Google travel
The COVID pandemic has unquestionably real estate assets allows hotels to focus on
made preventative medicine and self-care their primary business, enhancing efficiency.
trendy. The wellness business is flourishing, This will become more of the case in 2022.
and hotels, especially those with established
spas, are positioned to benefit. Health Sustainability concerns are impacting
diagnostic technology and bespoke decisions made at the hospitality
treatment plans offered by specialists who management level, as a natural extension of
conduct personal or group sessions are fast decreasing food waste and eliminating
becoming in demand. Management superfluous paper use. Simple decisions like
systems are increasingly used to monitor selecting towel rails to place during
and maximise income, customer renovations have huge consequences when
relationships, property, channels, and done in bulk.
reputation. The separation of operations and

Simple eco-friendly changes include manufacturing framework to increase
replacing small toiletries with larger, locally output, expectations are that the
sourced dispensers, adopting organic bed submarket will welcome small to mid-sized
sheets and using smart lamps to save services providers.
electricity. The 2020 and 2021 lockdowns
have boosted staycations. Despite the
reopening of international travel, many RETAIL
consider it too expensive for a big family trip Analysts suggest that the drivers of urban
or too complicated for weekend getaways. dwellers' eating habits are their lifestyle and
rising work rates as the world recovers from
the effects of the lockdown and related
INDUSTRIAL
COVID-19 restrictions (Local and
For years to come, logistics following international). Family outings have grown
COVID-19 will upset commercial real estate more important as COVID-19 has
paradigms. Disruption in commercial real highlighted the place of local alternatives to
estate capital allocation is likely, with international experiences. Speed and
industrial property receiving more money quality of service, food quality and timely
delivery were recognised as significant
and retail receiving less. There will be a
decision drivers by QSR customers.
decreased emphasis on physical storefronts
and a greater reliance on contemporary
eCommerce warehouses that are
increasingly automated and require less
labour. The demand is strong – but supply
to the quality required remains lacking. The
“
Pharmaceuticals, food and
drink, groceries and
pandemic has established that warehousing telecommunications
and logistics will be critical to the future of accessories are projected
trade within Nigeria's borders, at least. to be the likely winners
“
As the countries reconfigured is
Eating out
Select eateries - Number of locations, nationwide
Source: Northcourt

Local retailers will be more present in the PROPTECH
coming seasons as they look to maximise
the opportunities provided by the pandemic The proptech engine has moved into high
and the exit of international players. Key gear as technology will continue to affect
leases have already been signed and quite a the future of Nigerian real estate. Following
few deals will be concluded by Q1 2021 – Lagos State's announcement to launch its
when the 8-floor Ikoyi Plaza, a retail centre is monthly tenancy system, more proptech
expected to open in Q1 2021. startups offering flexible rental payments
are anticipated to witness increased
The centre will take 450 cars, virtual offices,
demand and investment. Demand for
a theatre, lounges, games arcade and
efficiency data, data management, and
supermarkets. Pharmaceuticals, food and
networking would continue to drive data
drink, groceries and telecommunications
centre investment in 2022. With investors
accessories are projected to be the likely
winners. Nigeria's organised fast food focusing on monitoring and optimising
business is estimated at N250Bn. property assets, Proptech companies will
continue to be important and garner more
investment. Last mile logistics startups
COWORKING helping merchants adjust to post-pandemic
changes would continue to benefit in 2022.
In 2022 coworking area operators are going As talks about sustainability grow, more
to see growing opposition from landlords proptech solutions will be created to
who plan to cut their losses on their office address sustainability and manage property
investments. Since the call for a carbon footprint. FDI and domestic
conventional workplace isn't as it was prior investment in proptech will certainly expand
to the pandemic, many landlords are in the coming year.
remodelling residential and other
commercial uses with low demand into
flexible workspaces. This offers current HEALTHCARE
coworking operators even greater motives
WHO estimates that the demand for
to introduce differentiation factors.
medical professionals is 237,000. Supply is
In 2022 large companies will consider approximately 35,000. Nigerian Medical
moving into coworking areas. Because of Association estimates that over 50% of
this that operators inquisitive about this Nigeria's $1.5Bn spend on medical tourism
target market have all probabilities to draw goes to India. The pandemic has helped to
it via way of means of getting ready highlight the need for large spending in
impossible to resist gives such as private healthcare, as evidenced by the budget's
serviced places of work, customizable exceptional allocations for 2022.
shared workspaces, flexible places of work
Privately owned primary healthcare centres
that develop with the company. We may see
and the availability of advanced technology
more of not just hybrid coworking areas –
such as magnetic resonance imaging (MRI),
but also "drop-in" areas where work is
computed tomography scan (CT), digital x-
discussed and executed over short spells in
ray, mammography, ultrasound scans,
hotels and restaurants.

radiation therapy, and other advanced government lacks the resources to carry out
devices are all possibilities. Test kits for its healthcare ambitions, the private sector is
malaria parasites, drug abuse, HIV/AIDS, emerging as a critical role in improving
and tuberculosis, in particular, would do Nigeria's healthcare situation. To entice
well in Nigeria. Medical consumables such private sector engagement in health
as syringes, needles, sutures, staples, projects, the government is utilising the PPP
packing, tubing, catheters, medical gloves, model.
gowns, and masks continue to be sourced
primarily from China. Because the The COVID-19 pandemic has revealed
telemedicine's potential. An increase in new
subscription levels has been recorded by e-
“
Nigerian Medical
Association estimates
health service providers. The government,
which had paid little attention to telemedicine
before the pandemic, has begun to include it
in its public health intervention programmes.
that over 50% of Nigeria's E-health experts predict a continued increase
$1.5Bn spend on medical in demand for telemedicine services, which
“
tourism goes to India they believe can be sustained by continued
user involvement and education on the value
of telemedicine.
Drugs
Select pharmacies, number of locations
Source: Northcourt
INFRASTRUCTURE transportation sectors taking $759Bn and

$575Bn respectively. This will require
Nigeria's infrastructure deficit continues to significant private sector participation to
limit economic potential. While the IMF and succeed in time and within budget. The
ADB have estimated that closing the Federal Executive Council approved
infrastructure gap will cost $3Trn, the N621.2Bn for the rebuilding of 21 federal
National Integrated Infrastructure Master roads by the Nigerian National Petroleum
Plan (NIIMP) estimates $2.3Trn over the Corporation (NNPC).
next 23 years (2020-2043) with energy and

The roads less travelled
Estimated Total Roads per Person (Kilometres per million persons)
Source: Frederick S. Pardee Center for International Futures

Images by: Northcourt | Blessed Works | OOJ.Arts | Olusesan Adebajo | Bloomberg | Uche Emodi
Disclaimer
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual, entity or
property. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the
date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice
after a thorough examination of the particular situation.
Real Estate Research & Advisory Real Estate Facility & Property Management Real Estate Brokerage & Valuation
Ayo Ibaru Oyindamola Bamisile Tayo Odunsi
ayo.ibaru@northcourtrealestate.com oyin.bamisile@northcourtrealestate.com tayo.odunsi@northcourtrealestate.com
+234 818 518 6975 +234 806 588 6527 +234 802 325 0289
Lagos: 01-291 0707

5B Adewale Kolawole Crescent,
Lekki Phase 1 research@northcorurtrealestate.com
www.northcourtrealestate.com
Abuja:
Ventures Park, 5 Kwaji Close, Maitama
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2022

A ll markets have continued to adjust

2022 Nigeria Real Estate Market Outlook 4

Development Partners International (DPI), a

2022 Nigeria Real Estate Market Outlook 5

2022 Nigeria Real Estate Market Outlook 6

N igeria produces the most oil on the

Exchange rates ($/N) Oil price per barrel ($)

2022 Nigeria Real Estate Market Outlook 8

Inflation (%) External Reserves ($)

The Nigerian government,

2022 Nigeria Real Estate Market Outlook 9

PASSED AT LAST The law aims to address the administrative

2022 Nigeria Real Estate Market Outlook 11

2022 Nigeria Real Estate Market Outlook 12

2022 Nigeria Real Estate Market Outlook 13

COVID regardless, Nigerians moved on with their lives

2022 Nigeria Real Estate Market Outlook 14

2022 Nigeria Real Estate Market Outlook 15

FIXED INCOME AND MONEY Maiduguri and Enugu-Port Harcourt roads,

Saving for a rainy day

2022 Nigeria Real Estate Market Outlook 17

Nine months later

2022 Nigeria Real Estate Market Outlook 18

2022 Nigeria Real Estate Market Outlook 19

HOME COURT ADVANTAGE Security continues to be a priority in the

2022 Nigeria Real Estate Market Outlook 21

The good thing about gates

The COP26 conference on climate change adoption of PropTech, sustainable design

2022 Nigeria Real Estate Market Outlook 22

2022 Nigeria Real Estate Market Outlook 23

Lekki Phase 1 N140,000 N196,000 N184,361 N 198,000 N322,000 63

Victoria Island N312,000 N300,000 N351,912 N 330,000 N398,000 21

Sangotedo N26,000 N28,000 N30,596 N 27,750 N42,000 51

Agungi N84,000 N95,000 N108,757 N 105,364 N170,000 61

Ikeja GRA N260,000 N261,000 N262,945 N 295,829 N360,000 22

INFRASTRUCTURE flagship projects, the Federal Government

2022 Nigeria Real Estate Market Outlook 24

2022 Nigeria Real Estate Market Outlook 25

offers a comprehensive carrier neutral track record since inception.

2022 Nigeria Real Estate Market Outlook 26

Cities within cities

All the way up

2022 Nigeria Real Estate Market Outlook 27

Money well spent

Noise pollution in residential areas, affected. Neighbourhoods with high noise

Placing a value on peace and quiet

Source: Idu, Uchegbu, Ubani, and Akalemeaku (2021)

2022 Nigeria Real Estate Market Outlook 28

The speed of sound

Source: Idu, Uchegbu, Ubani, and Akalemeaku (2021)

Source: Journal of South African Business Research

2022 Nigeria Real Estate Market Outlook 29

A review of the relationship between neighbourhood density, housing quality,

Where the heart is

2022 Nigeria Real Estate Market Outlook 31

This further contributes to the disparity in

As the capital becomes more commercial

2022 Nigeria Real Estate Market Outlook 32

Source: Castles, Northcourt

2022 Nigeria Real Estate Market Outlook 33

2022 Nigeria Real Estate Market Outlook 34

While some employers insist on a complete