Nigeria is rapidly approaching an economic crisis as the COVID-19 global pandemic has put the world on lockdown and sent Brent crude oil prices to a 20-year low. Spurred by lower global demand and reliance on oil exports for 90% of its foreign exchange income, Nigeria’s economy and her fragile currency are being pushed to their breaking point.
In this report, we will focus on the impact this pandemic will have on the real estate market in Nigeria. So far, key themes include mass concessions, re-negotiation and restructuring activity, slowed decision making, stretched out project deliveries due to the lockdown and more. After outlining the potential property sector losers, hospitality and retail most especially, alongside potential winners (industrial and healthcare), we discuss the impact of the COVID-19 pandemic on individual property sectors and the direction of rentals, capital markets and more.
Within this uncertain environment, we recommend that market participants including asset owners, real estate service providers and others stress test their businesses at varying levels of reduced income, use the downtime for market research to validate investment cases and focus energies on property sectors that are more resistant to shocks.