Land prices soar around Lekki as speculators bet on LFTZ, Dangote refinery
The value of land in the Lekki Ibeju axis of Lagos has soared sharply in the last six months of this year, as speculators bet that the scheduled coming of Dangote Refinery and other major projects in that zone will lead to a sharp rise in demand for accommodation.
Most impacted are the Ikate – Agungi – Abraham Adesanya – Sangotedo axis, which border the upcoming Lekki Free Trade Zone (LFTZ) and the much expected Dangote refinery.
Speculators are pushing up land prices in this axis with eyes on the LFTZ and the Dangote refinery project, among other anchor schemes nearing completion. These areas are seen to have growth potential, arising from growing demand for land for housing, industries, schools and other business activities.
Concerns are however mounting that the value of land in this axis might go the way of the once prime Apapa, which being close to the port and having only one major access route, ended up a nightmare, on account of mind-boggling taffic jams caused by great numbers of heavy duty trucks cramming the roads. Apapa, Nigeria’s premier port city is gradually degenerating into a wasteland because of its poor infrastructure.
Though the value of land in other parts of Lagos dropped, with Victoria Island slumping from N430,000/$2.18 per square metre in 2016 to N312, 000/$0.86 per square metre in June 2017, representing a 27 percent drop, places like Lekki Phase 1, Agungi also in Lekki, and Abraham Adesanya area, appreciated 12 percent, 12 percent and 13 percent respectively.
Prices of land in Lekki Phase 1, Agungi and Abraham Adesanya rose from N125,000/$620, N75, 000/$380 and N30,000/$150 respectively in 2016 to N140,000/$1,200, N84,000/$230 and N34,000/$90 respectively, in June 2017.
Demand for and investment in real estate, particularly land, usually follow major developments like the LFTZ, which is an emerging business hub in the Lekki axis of Lagos. The 650,000-barrel per day Dangote Refinery, expected to come on stream in the first quarter of 2019 is also a major development.
The Dangote refinery is the largest industrial undertaking in Nigeria. It includes the refinery, which is meant to refine 650,000 barrels of oil per day and is, by all projection, the largest in the world. There is also the petro-chemical and fertiliser plant, which are also projected to be the largest in the world.
“I think it is an incredible industrial undertaking in the country and most ambitious in Africa today. It is really inspiring,” said Yemi Osinbajo, Nigeria’s Acting President, during a tour of the free trade zone.
Apart from Dangote refinery, other investments have been made in the free zone and as at the first quarter of this year, Akinwunmi Ambode, Lagos State governor, estimated that $6 billion had been committed in the LFTZ, which sits on about 16,000 hectares of land.
“You can just visualise what that means to the economy of Lagos. Direct jobs to be created here are 135,000 people and indirect jobs 100,000 people”, the governor said, disclosing that about $62 million will be invested in the free trade zone by a partnership between his state and its Chinese partners.
All these workers will need accommodation one way or another, meaning that the current rise in the value of land in this axis is just a tip of the iceberg, in terms of opportunities that await those who are smart and savvy enough to invest now. Analysts say the value of land may rise over 100 percent in the next two years, when the refinery becomes operational.
Aliko Dangote, the president of the Dangote Group, hopes that by the time his company finishes these investments, especially the gas pipeline, Lagos can run without any interruption of electricity supply. “It will be as good as living in London, where you don’t see power outage”, the business mogul assured, adding, “that is because we can supply power from here to anywhere; that means tripling the Gross Domestic Product of Lagos State and creating a lot of economic activities.”
It is against this backdrop that speculators have swooped on this part of Lagos and are pushing value up with all the resources they can muster. Again, the centrality of land to the development of real estate remains immovable and according to Tayo Odunsi, CEO, Northcourt Real Estate, it was unchallenged in the first half of this year.
Daramola Akindolire, Executive Director, Real Estate at AMFacilities, agrees, stressing that land is so central to real estate that it is today, the most sought after by investors, especially Diaspora Nigerians.
According to him, “land is at the core of real estate investment”, disclosing that their site and serviced scheme in the Lekki area of Lagos is almost sold out, while they could not sell many units in the estate project they started some years ago.
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