Report: Ikoyi Recorded 113% Rise in Value of Land in Two Years

*Says lands occupied by Ikoyi, Kirikiri, Benin prisons worth N37.7bn

Dike Onwuamaeze

The Nigeria Real Estate Market Review for the first half of 2023, has reported that the value of land in Ikoyi grew by 113 per cent, moving up from N514,890 per square meter (psm) to N1,1 million psm between 2021 and 2023.
This was revealed in a report by Northcourt, a Lagos based real estate firm, which also projected that the value of lands occupied by 15 major prisons that are located within prime city centres in 12 states in the country are worth more than N43.15 billion.

The report obtained by THISDAY at the weekend, specifically projected that the Ikoyi Prison, Kirikiri Maximum Security Prison in Lagos State and the Benin City Medium Security Prison in Edo State are standing on lands that are worth N23.884 billion, N12.566 billion and N1.299 billion respectively.
“The hitherto strategic placement of these correctional facilities raises concerns around land use efficiency and missed opportunities for development. Relocating these prisons to outskirts areas holds the promise of unlocking the potential of the prime real estate areas they currently occupy.

“This could lead to better utilisation of land resources, allowing for the creation of more functional and socially beneficial spaces that align with the evolving needs of urban centres. Moving these facilities outside city centres will support more sustainable urban planning,” the report stated.
The Chief Executive Officer of Northcourt, Mr. Ayo Ibaru explained: “Old Ikoyi, known for its aspirational assets, witnessed price growth with average land prices in 2021 standing at N514,890psm. By 2023, this had surged to N1.1m psm – a 113 per cent rise.

“Victoria Island, a prime commercial and low density-residential area, experienced moderate but steady growth. Land prices rose from N273,000psm in 2021 to N516,000psm in 2023. This growth is partly due to exchange rate imbalances and sustained interest from corporate entities.
“Sangotedo, increasingly (and successfully) punching above its weight continued to enjoy attention from the Lagos State Government, by way of infrastructure and developers, the latter keener than the former. In 2021, land here was priced at N22,964psm. By 2023, this had surged to over N48,000.”

Ibaru also stated that “residential vacancy rates in Old GRA, Port Harcourt maintained a two per cent rate throughout H1 2021, and 2022, with an increase to three per cent in H1 2023. The GRA 3 area saw a vacancy rate of six per cent in H1 2021, eight per cent in H2 2022, and three per cent in H2 2023
“These trends suggest the neighbourhoods’ resiliency and attractiveness in the face of heightened security. Vacancy rates in both Elenlewo and GRA 2 decreased gradually.

“Elenlewo began at six per cent in H1 2021, and continued to decline to four per cent in H1 2023. GRA 2 began at two per cent in H1 2021, remained unchanged at two per cent in H2 2022, and maintained this rate in H2 2023.
“The Peter Odili and Woji residential areas, beneficiaries of the ongoing N200 billion Ring Road project, exhibited a variety of vacancy rate patterns.
“In H1 2021, Peter Odili’s vacancy was five per cent which then decreased to four per cent in H2 2022, and increased to seven per cent in H1 2023. In contrast, Woji began at seven per cent in H1 2021, fell to six per cent in H1 2022, and then fell to two per cent in H1 2023.”

The report stated that the retail performance in Abuja generally improved even though basket sizes remained smaller than in previous seasons.
“The vacancy rates at Apo Mall moved from 17 per cent in H1 2021, to zero by H1 2023. Ceddi Plaza moved from 18 per cent to four per cent in the same time frame.

In H1 2021, Jabi Lake Mall had an 18 per cent vacancy rate. This dropped to eight per cent in H1 2022 and then four per cent in H1 2023.  
The report also stated that the Nigerian market for hotels was expected to grow 6.5 per cent between 2022 and 2025, making it one of the fastest-growing in Africa.

According to Ibaru, “commentators believe that the market for hotels will reach $1.67 billion by 2027.”  

The report also projected that the short term effect of the reforms introduced by President Bola Ahmed Tinubu would increase the cost of construction in Nigeria and much of West Africa.  

“Building projects will take longer. Fewer residents will likely relocate within (and indeed, out of) key cities. The desire for new homes will be tepid at best and the cost of property maintenance will likely increase. Prices for apartments in gated estate will increase.  

“As living costs become more central to occupiers, residential rent defaults will go up as the ability to pay takes a back seat. Rising petrol prices will make it hard for renters to pay their bills in the short term.”