What impact will Lagos building collapse have on luxury apartments?

The recent tragic building collapse in Lagos that claimed the lives of 45 individuals has sent shockwaves through the real estate industry in Nigeria. Despite this devastating event, industry analysts note that the marketing of properties in the Ikoyi region, where the building collapsed, has not come to a halt. However, there is a noticeable shift towards institutional developers with a proven track record for executing quality projects. Dolapo Omidire, Research Director at Estate Intel, sheds light on the aftermath of the incident and the implications for the luxury apartment market. Omidire emphasizes the importance of aligning with developers who have successfully completed similar projects in the past, especially in the luxury segment where prices can reach up to $1 million. This shift towards established developers with a history of delivering quality projects is expected to shape the future landscape of the real estate market in Lagos. Despite the tragedy, the interest in property investment in the Ikoyi area persists, albeit with a newfound emphasis on credibility and reliability. The collapse has underscored the importance of due diligence and adherence to construction standards in the industry. Developers and contractors are now under heightened scrutiny, with potential buyers prioritizing safety and quality in their investment decisions. The regulatory authorities in Lagos, particularly the building control agency, are facing criticism for the failure to prevent such a catastrophic event. The collapse serves as a wake-up call for regulators to enforce stricter measures and ensure compliance with safety protocols to prevent future tragedies. Moving forward, the real estate market in Nigeria faces challenges stemming from the economic fallout of the pandemic, coupled with currency depreciation and financial instability. The institutional real estate market, in particular, has been grappling with the impact of dollar financing on asset values. As the country strives to recover and return to normalcy in 2022, investors are exploring new sectors such as industrial and data centers as alternative investment opportunities. The industrial and data center segments have witnessed increased activity and interest from investors seeking stable returns in a volatile market. In addition, the rising trend of prop tech (property technology) is poised to revolutionize the real estate sector in Nigeria. Prop tech startups are offering innovative solutions to streamline processes and enhance efficiency in property transactions. Collaborating with prop tech companies could potentially lead to a significant transformation in the real estate industry, paving the way for a new era of growth and development.