LAGOS ULTRA-LUXURY REAL ESTATE MARKET - Q2,2024

The increased emphasis on opulent living environments, architectural elegance, mastery, and flamboyance has been one of the biggest changes in Nigeria's luxury home sector in recent years. The luxury residential market in Nigeria is expected to compete in the global luxury market space as attention fully shifts to a combination of grandeur, affluence, style, and exclusivity to lush greenery, tech-integrated smart homes, adequate floor-to-ceiling height, a business lounge, private elevator, swimming pools, tennis courts, gyms, and clubhouse with ample underground parking and breathtaking views with eco-friendly practices.

Despite market headwinds and exchange rate volatility, Nigeria's ultra-luxury home market is still well-represented in the African Luxury Residential Market ranking and the global ultra-rich residential investment portfolio.

The developers within this ultra-rich residential market segment continue to outsmart themselves in design and finishes, tech-smart solutions, sustainability, and environmentally conscious homes that best suit investors' sentiments, as market-driven factors fuel demand for upmarket apartments.

According to the data made available by akinABRAHAM & ASSOCIATES LTD, as of June 19, 2024, the average price per square meter for a three- to five-bedroom apartment in this ultra-luxury residential market was between $3,500 and $7,300, indicating a 252% increase in value in just three years.

Notwithstanding the market price of less than $10,000 per square meter, ultra-luxury residential market rent per year shows a rent tag above $63,000, which justifies the inflow of capital, strong investor confidence, and strong demand currently experienced in the Lagos luxury residential market, according to the market survey conducted in Ikoyi, Banana Island, Victoria Island (Eko Atlantic City).

Investors are also encouraged to keep pouring money into this exclusive club of 1% of 1% because of the residual value growth, which reveals much about the relationship between the development value and vacant land value prospect. This places the value growth of luxury residential development per square meter to land value per square meter between 140% - 520%. Despite the difficulties in this industry, investors were drawn to assume the built-to-cost risks unique to it by the influence and alluring rewards that come with return on investment, NOI Margin, cash flow, and growth potential.

As the ultra-luxury residential market in Nigeria becomes mature in price per square metre, we’d love to see how this affects the Lagos (and, by extension, Nigeria) prime residential market, as well as investor confidence regarding the investments and growth expectations.

Key takeaway:

💜 Market rent per annum over $65,000

💜 Capitalization Rate (Cap Rate) from 3% to 3.5%

💜 Capital Appreciation: 252% growth over 3yrs period

💜 Price per square metre: $3,500 - $7,300

💜 Residual Value Growth: 140% - 520%

💜 NOI Margin

💜 Built-to-Cost

For additional information on to navigate the 1% of 1% luxury residential market in Nigeria, please get in touch with us by phone at +234-806-877-4629, by email at info@akaa-ng.com, or on our website at www.akaa-ng.com.