Notwithstanding the economic recession and vacancy rate that are unsettling the real estate sector, Ikoyi seems to remain a place of choice for developers and independent builders in the country.
In time past, once the most exclusive highbrow residential estate in the land, Ikoyi, the famous neighborhood of the rich and mighty in Lagos has obviously fallen on difficult times. But all that is changing fast.
Hallmarks of the past – portly homes sandwiched between lush green vegetation that once defined the character of the settlement – have suddenly become a disappearing legacy, as an unprecedented onslaught of development activity overwhelms the very attributes that made the area the location of choice for the well-heeled.
The changes are quite visible. In place of single-family housing, high-rise towers have become the development option of choice rather than the exception. Office blocks formerly on the fringes of the residential area have of late been feeling more at home tucked in between the sprouting apartment blocks. Also, more buildings than ever before are today being converted into offices and shopping complexes.
Today developers are reshaping, redesigning and redeveloping the community, bringing more value for properties in the location. Individuals are reforming the real estate sector, which has become fundamental to propelling economic development and alleviating poverty in Nigeria.
A lot of new developments including residential estates and commercial properties are springing up in major streets. City-based estate surveyors and valuers say the Ikoyi real estate market is having increased activity. A partner in the firm of Ubosi Eleh & Company, Mr. Chudi Ubosi told The Guardian, “the state of the Ikoyi real estate market is fair. “It’s not strong but at the same time it cannot be said to be weak. There is still demand for Ikoyi properties whether for lease or sale.
“Ikoyi represents the cream of real estate investments in Nigeria and as such, there is a constant demand for it. All the top chief executive officers, industrialists, diplomatic Corp, all find refuge in Ikoyi either as offices or residences. Rents are high and sometimes denominated in foreign currency. “I would not say there is a rebound per say, but surely the market is seeing signs of increased activity. It will be a while before we see activities in transactions like pre 2014.
According to him, the increase in development being witnessed is such that real estate takes a long incubation period. “Site acquisition, design, approvals and raising finance all take a lot of time. Many developers in Ikoyi will not ordinarily delay their developments because of economy.
“For a lot of them an Ikoyi development is the crown on their rise through the business world. Many such developments as we see now may not be purely economic but including social and a hedge for inflation etc. The developers may not necessarily be looking purely towards rental returns only,” he said.
The Chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV) Faculty of Estate Agency and Auctioneering,, Sam Eboigbe said, “we see some purposeful activities in Ikoyi area , especially in high-rise commercial and residential portfolios.
“Though sector has in the last three years witnessed low activities as a result of the economic meltdown but there are some positive indicators that will give stakeholders ray of hope.CBN is encouraging banks to resume and increase loan advances to customers.This is a healthy development and would ultimately influence activities in that sector.
He explained that Ikoyi shares boundary with Banana Island. And it is on record that Banana Island is enjoying unprecidented appreciable rates and values never experienced in the history of property listings and deals in Africa. It is simply unimaginable that we can be talking about N500,000-N550,000/ per square metres as land values in Banana Island. The listings for various classes of properties are similarly characterised by revised appreciable rates.
Eboigbe said: “It is only certain that immediate adjoining neighborhoods like Ikoyi, Osborne phase 1 could attract some measure of appreciation in the rates and values.“Again there has been increased preferences for Joint Venture options in property development activities in Ikoyi in recent times. Most of the outings have been staged to have the backing of international investors and funding.
“These are usually intelligent and automated designs with state of the Art facilities in response to the stylish request for high quality residential and commercial properties.“Investors and real estate professionals have similarly been involved in brainstorming sessions to tackle the perceived lull in that sector resulting in the voids and vacancies and it appears that tangible breakthroughs have been achieved as a number of properties have achieved reasonable letting in the recent times,” he said.
Eboigbe explained that the strategy is to collapse the rates in response to the offers of would be clients to attain the targeted capacity regardless of the projected cash flows. Stephen Ola Jagun, the principal partner of Jagun Associates, argued that property has a good hedge against inflation, so those who have the money will rather want to tie them to property than make it lose value in the bank.
He said: “All over the world, it has been realised that Nigerian property market gives very high return on investment. This is encouraging Nigerians in diaspora who have good equity on their property to scoop same and bring home to invest while enjoying good rate for a mortgage abroad.”
The Guardian investigation also revealed that most of the Ikoyi buildings were remodeled to exhibit luxury and attract top-notch tenants. For instance, Sisi Paris is one of its latest creations, built for those who insist on a lifestyle of luxury. The 10-storey luxury apartments come with opulent furnishing.
According to the Executive Director of Cobblestone Properties, Mrs. Bella Disu, who unveiled a complex recently, “when we decided to restructure the building, we focused on delivering the ideal luxury living experience. To meet the needs of the average family, each three and four bedroom apartment was redesigned to have two living rooms, one of which can be re-purposed as a study, cinema, or playroom for children. Each apartment also has a fully fitted laundry and a pantry,”
“We believe that true luxury extends beyond fittings and finishing; it is in every detail that contributes to superb daily living. That is why Sisi Paris goes a step further by delivering first-rate service. Round-the-clock concierge will provide scheduling and reservation services while the on-site minimart is a one-stop-shop for daily needs,” she added.