Agusto & Co. Limited, the foremost Pan African Credit Rating Agency and one of the leading providers of industry research, in its 2018 real estate (Lagos Residential) industry report suggested Cargotecture innovations for solving housing problems in the state.
“Going forward, Agusto & Co. believes that Cargotecture innovations in housing may be a solution to the rising housing deficit in Lagos, especially for low-income residential real estates, as this solution combines low cost, speed and environmental friendliness,” it said in the report.
Cargotecture or shipping container architecture is a form of architecture using steel intermodal containers (shipping containers) as structural element. It is also referred to as a portmanteau of cargo with architecture, or ‘arkitainer’.
Data obtained from Agust & Co revealed that Lagos government requires about N3.5 trillion to deliver one million housing units annually in line with the government’s desire.
If the state’s 2018 budget for capital expenditure is fully devoted for housing, it will only be able to cover less than 10 percent of its annual housing requirement. Thus, an estimated 19 years of similar expenditure will be required to bridge the current housing deficit, estimated at 3million units.
Lagos population in 1871 stood at 28,000 and grew to about 252,000 in the 1970’s. Today, Lagos population is about 20 million and it is the most populous city in Africa—almost same size as the population of Ghana.
BusinessDay survey reveals that the use of containers as building material has grown in popularity in other parts of the world due to their inherent strength, wide availability, and relatively low expense.
But in Nigeria, it is not an initiative that is well known or frequently used as a means of constructing housing project.
Tempohousing Nigeria (THN), one of the real estate firms that uses cargotecture, while addressing misgivings of Nigerians on houses not done with bricks, said one of the biggest hurdles they have with alternative building methods is education and knowledge about cargotecture.
“What we hear is, this is container; going forward we intend to educate people and let them see what the so called container actually looks and feels like, and once you enter you realize that it even looks better than a normal building. It’s easier to control, not using cement, no cracks and all that. It’s just about education and doing things that people can walk in and see,” Tempohousing Nigeria said in statement.
Agust & Co’s survey of the residential real estate market in Lagos reveals that, as at the end of March 2018, Yaba had the highest rental yields in the mid-income residential segment, thus showing steady appreciation in rental yields.
Whereas Apapa (degraded by major traffic gridlock caused by indiscriminate parking of trucks on major roads) had the lowest annual rental yield of 3.1percent as at end of March 2018, evidencing weak demand for residential housing as well as decline in real estate values.
Agust & Co expects continued improvements in the near term regarding new residential real estate developments mainly in the mid-income segment as well as mixed-use developments.
“We believe developers will start construction of some erstwhile abandoned residential projects and new developments especially in the mixed-use segment,” it said in its 2018 report.
The report by the rating agency provides information on the Lagos residential Real Estate Market (‘the Industry’) and covers the following: overview, size and structure of the Nigerian real estate industry and that of Lagos residential Real Estate Industry.
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