Lagos prime real estate market

The real estate market in Lagos has faced significant challenges in recent years due to currency volatility and lack of liquidity, impacting capital flows into sub-Saharan Africa. According to Chinwe Ajene Sagna, the Head of West Africa Corporate Solutions at JLL, these factors have hindered international investments in Nigeria, leading to a slowdown in transaction volumes. In a recent interview with CNBC Africa, Sagna discussed the market dynamics and the key factors influencing the prime real estate sector in Lagos. One of the major issues affecting the market is the uncertainty surrounding the repatriation of funds by international investors. Sagna noted that many investors are hesitant to make large investments in Nigeria due to concerns about the ease of transferring profits out of the country. This lack of liquidity has led to a cautious approach from both investors and corporates, resulting in longer decision-making processes and increased analysis before committing to real estate investments. Despite these challenges, Sagna highlighted a positive shift in investor sentiment as conversations with corporates have picked up in recent months. The government's efforts to stabilize the currency and improve liquidity in the market have contributed to a more optimistic outlook among investors. Sagna emphasized the importance of sustainable policies and their impact on investor confidence, noting that ongoing dialogue and transparency are key to retaining investor interest. In addition to currency concerns, structural changes in the economy have also influenced the real estate market. Sagna mentioned that many corporates are reevaluating their real estate portfolios to optimize costs and enhance value. This process involves strategic consolidation, disposal of underutilized properties, and property enhancement to attract tenants. Sagna highlighted the trend of offering incentives such as rent-free periods and flexible payment terms to entice corporates to occupy class A properties, a strategy commonly used in other global markets. Sagna also addressed the issue of oversupply in the A-grade office space market, noting that new developments continue to enter the market despite existing saturation. With several large-scale projects underway, the market is expected to face increased competition for tenants, potentially impacting rental rates and occupancy levels. Looking ahead, Sagna remained cautiously optimistic about the market outlook, citing the increase in conversations and interest from corporates as a positive sign. While challenges persist, including oversupply and currency volatility, the market is showing signs of resilience and adaptability. By addressing structural inefficiencies, offering attractive incentives, and fostering investor confidence through transparent policies, the Lagos real estate market aims to navigate the current economic landscape and attract sustainable capital flows for future growth.