The Lagos Real Estate Boom

My background most recently has been commercial real estate. So the stuff is close to my heart. I love it. It gives me goose pimples. Lagos is experiencing a real estate boom of Russian Oligarch sized proportions. I can put it no other way. I keep hearing similar outlandish sized stories of outlandish returns. I'm not sure I should reveal this or you'll all come with your £ and $ and add to this gold rush, but that's one of the reasons I started this blog so...

I recently heard the one about LNG Nigeria Staff Co-operative buying reclaimable land (water) behind Nicon Town in Lekki. I believe the price was N4m per plot (£16k, $32k). Those with the means bought more than one plot. Some months later, 9mths I believe after sand-filling the land, there is a requirement for an additional payment of N5m to pay for infrastructure. Some are now selling to reap profits. Sale price is N11m. 2.5x your initial investment in 9mths for mid level staff in a company.

I went to see a luxury flat while house hunting the other day. Lekki Phase 1, two yachts for the use of residents, plus an assorted plethora of motor bikes, water scooters, kids motorised cars etc also for the use of the residents. Water backing property with a beautiful view of the sea (or the lagoon). $70k per annum / £3,000 per mth, 3 years in advance. 5 already gone, only one left. I am sure the plot of land was not bought based on an appraisal of a $70k per annum rent. By the way, the guy/owner had a magnificent penthouse of two knocked through apartments at the top, with telescope for the view, lovely decor etc, boy, I could have been in Miami.

I went on a client visit to see a developer yesterday. Very very un-assuming guy, by the time he had rolled out their vision for me, the prices that commercial office space they were just finishing rennovating was going for, the prices that the serviced apartments on top were going for, his pipeline of deals and the opportunities in the market place (he also mentioned that construction costs were now at 3 times what is paid in Dubai due to the boom) my head was reeling. His very words in relation to this particular development, "cash cow".

I have come across at least 3 $300m+ deals in the 3weeks I have been here. Some we are involved in, some others are involved in. The hotel business is booming. If you haven't been to Lagos and you come back in a years time, you won't believe your eyes at the new high-end developments that would have emerged out of nowhere.

Trust me, it's all going down (not in a bust sense but in a boom sense).