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Unmarked hotels and short-stay apartments report high occupancy rates during COVID-19

The rise of short stay apartments and boutique hotels point to its profitable business model and financial viability.



Unmarked hotels and short-stay apartments report high occupancy rates during COVID-19, Hall 7 - Curbing the housing deficit in Nigeria: Hall 7 commissions state of the art residential apartments

It was meant to be a regular end-of-month meeting at a residential estate located in Lekki Phase 1, beside the beach. Residents gathered for their usual monthly meeting and were at the ‘other business’ segment of the agenda when someone spurted out a remark that ignited an uproar in the forum.

To the shock of the Exco members, one of the residents had turned their apartment into a short-stay, breaking the estate bye-laws. The accused resident claimed that it was their only way of surviving amidst the COVID-19 pandemic which had led to a downturn in his regular business. Unknown to other residents, this is not an isolated case in their estate.

Thanks to tech apps like Airbnb, it is now a common feature for most houses that do not deliver the monetary benefits assigned to their income.

The hospitality sector has been one of the hardest hit by the COVID-19 lockdown. Most of the major hotels with 3-4-star ratings have shut down their doors for months, resorting to ancillary services such as laundry and private dining to keep the lights on. But while major hotels scavenge to survive, smaller boutique hotels are having the time of their lives.

(READ MORE:COVID-19: Lagos ramps up measure to smash disease as it begins fumigation)

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Hotels without names

Boutique hotels with less than 40 rooms have operated surreptitiously for years, preferring to operate without signboards or brand names, as is the case for their more illustrious majors. For some hotels, they are known to their customers only by the street number. Hotel names like 12, 23, 42 etc., are not uncommon across most major suburbs in Lagos.

This nomenclature for hotels is not surprising to most hospitality experts. They explained to Nairametrics, that most of the hotels were previously residential houses but turned into boutique hotels by their owners, and continue to retain the house number. Some also believe it is a common tactic used to avoid taxes and regulators.

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Converting residential apartments into hotels, or short-stays helps owners make more from room rates than they would if the apartments were rented. This business model has now morphed from boutique hotels to short-stay apartments.

The facilities are also designed to give the home-away-from-home feel, as they cater mostly to business travelers, weekenders, groups, pleasure seekers, adventurers, and many who wish to explore life differently, away from their conventional homes.

These lodging options offer a simple alternative to big-name hotel chains, with the provisions of a variety of convenient in-house self-service amenities. Today, more travelers are choosing to book short-term rentals, rather than stay in hotels.

(READ MORE:Estates in Lekki increase electricity tariff to N105/kWh)

How patrons book facilities

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For most of these hotels, their booking channels range from word-of-mouth to a simple online Google search. Some of their customers resort to apps like Airbnb,, or Trip Advisor to make their bookings. Others go directly into the website of managers of these apartments, and select their preferred cities and spaces, view the amenities, and make payments. Once payment is confirmed, they receive an email and SMS notification of their door access code, and Google maps address to the space. After being checked in, guests simply use WhatsApp or text messages to request concierge services, which are available 24/7.

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According to an owner of such facility, “The idea was conceived when I found that travelers now want the privacy, functionality, flexibility, and comfort of a high-end home, along with the efficiency of hotel services.”

Olajide Abiola, Co-founder and CEO, Smart Residences Ltd, operating as Gidanka, explained that traditional hotels with their limited spaces, and boring repetition of interior decoration have given rise to the demand for better lodging and accommodation options.

“People want to live like locals in new and fascinating neighborhoods, whenever they travel. At the moment, it is an emerging industry in Nigeria, with little competition,”

“Airbnb represents the only competition, but with limitations in that, quality supply on such home-sharing platform, is like a game of Russian roulette, as there are apartments of little quality and uniqueness,” said Abiola.

According to him, his company works with local developers and realtors to design and take out long leases on spaces in neighborhoods determined to be travelers’ and tourists’ preferences, based on research and data analytics.

(READ MORE:Hotel resorts fully booked as middle-class Nigerians spend big for Valentine’s Day )

How they get funds

A source, who pleaded anonymity, because he was not permitted to talk on behalf of House 23, a short-let apartment in a location in Lagos, told Nairametrics that the owners of the apartment secured loans from some banks (undisclosed), to convert the building to short-let apartment standards.

“Initially, we had challenges with patrons, and that is because the estate management frowned at using the residence for commercial purposes, but the business picked later. Without many publicity tools like signposts or any form of paid adverts, the business has been self-sustaining,” he said.

In the case of Gidanka, which has facilities across four neighborhoods, Abiola said, “We secured N1.07 billion in seed funding, and have been able to lease out properties in four neighborhoods, to provide 86 unique spaces across the Abuja cityscape in the last seven months,”


“We have hosted travelers from over 12 countries, and have paid 65% of the loan. Interestingly, in the face of the COVID-19 pandemic, our spaces have seen steady patronage, because of the excellent service reputation earned within the short period. Initially, there was a one-week dip in occupancy rate because of the pandemic, but as the chaos ebbed, the demand normalized, as people sought living spaces that felt like home,”

“There has been steady uptake, and about 30% to 70% month-on-month growth since January 2020, when an additional 28 space units were added. The revenue is steady, ticking up and good,”

“Revenues are made from nightly, weekly, and monthly room rates. We will be cash flow positive before the 4th quarter of 2020, even in the face of COVID-19. Out of the debt raised, 65% has been offset within seven months, which is five months ahead of the moratorium.”

(READ MORE:COVID-19: partners others to provide self-isolation centres for Nigerians)

Highly Profitable

The rise of short-stay apartments and boutique hotels also points to their profitable business models and financial viability. An operator in a hotel located on Victoria Island informed Nairametrics that apart from the initial one-month lockdown in April, occupancy rates have picked up to pre-pandemic levels.

“Most of our rooms are fully booked sometimes for days,” he explained, preferring to be simply called Femi.

In another hotel in Lekki, the owner told Nairametrics that his major challenge was not having enough rooms. “I wish I could purchase the adjacent building and expand my operations. I lose money I would have easily earned because I have to refer my customers to other hotels,” he remarked.

Sometimes, customers book a day or two ahead just to be assured of a room whenever they need one. Asked who their typical customers are, he maintained that they were mostly young single men with laptops, “I don’t know if they are Yahoo guys, but most of them seem decent and could pass for tech geeks. We also have a lot of married men as customers, even though they hardly sleepover.”

In contrast to the smaller boutique hotels, bigger hotels have all shut down and despite opening recently, still operate skeletally, as Nigerians gradually ease back to work. Most of the hotels are also suffering from a lack of banqueting and physical meetings, which are two major drivers of room occupancy rates.

(READ MORE:Lagos seals off church, others in Surulere, moves against illegal conversion of open spaces)


Like other real estates, short-let apartments also have their challenges, ranging from reputation management to irregular power supply.

“When one offers such high quality, efficient, and high standard services that we are offer in an environment where consumers have lost confidence, restoring such can be an uphill task. Therefore, we sometimes have prospective guests, who want to carry out an inspection, just to be sure that the pictures and the amenities on the website are not too good to be true,” Abiola stated.

On the issue of irregular power supply, he said, “People want to be sure they will have continuous power supply at all of our spaces. Most times, we must deliver comfort through alternative power sources.”

In all, there appears to be no barrier to the growth of short-term home rentals. The regulation is still business-friendly because it remains a developing and widely untapped industry.


Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Real Estate

Federal Mortgage Bank disburses additional 8,700 homes, N112 billion in three years

NHF collections increased by 80% or N186 billion to reach a cumulative amount of N418 billion as of September.



In a bid to boost the delivery of affordable housing for Nigerians, the Federal Mortgage Bank of Nigeria (FMBN) has disclosed that it spent an additional sum of N112 billion and built additional 8,700 new homes between 2017 and 2020.

This information was revealed in a statement issued by the Head, Corporate Communications Group of the Federal Mortgage Bank of Nigeria, Mr. Lawal Isa, on behalf of the Managing Director, Mr. Ahmed Dangiwa.

Highlights of the statement:


  • The total sum of N265 billion has been disbursed as housing fund by the Federal Mortgage Bank of Nigeria. This sum indicates an increase of N112 billion or 74%, up from N152.5 billion disbursed by the institution as of 2017.
  • About 8,700 new homes have been built between 2017 and 2020, representing a growth of 43 percent to attain a cumulative of 29,133 funded housing units.
  • Within the period, the National Housing Fund (NHF) collections increased by 80% or N186 billion to reach a cumulative amount of N418 billion as of September.
  • Home renovation micro-loans increased by over 2,000% from about 2,600 loans to about 56,000 loans in the last three years.
  • About 570,000 contributors had been added to attain a contributor base of over 5.1 million NHF subscribers.
  • 34 out of the 36 states of the Federation were compliant regarding workers’ contributions, with five states resuming contributions within the past three years.

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Real Estate

How to own your home in 5 years without a mortgage

The invest-to-homeownership option is ideal when you do not have enough cash to buy a home in one fell swoop of payment.



Home ownership is usually top on the list of all the reasons why people want to invest in real estate, globally. Real estate is in no doubt an indispensable tool designed for the support and sustenance of human life. It is also a tool created for mankind to express creativity, desires, and ambition. When the Coronavirus pandemic spread across nations, governments were forced to give shelter-in-place orders, causing us all to stay in our homes for months. This shows that homes are indeed a necessity. Yet, it is beyond reach for many people in developing countries who desire to own one.

Mortgage loans are one of the common options for homeownership in many countries because it is believed to create some ease of home ownership. In Nigeria, mortgages have not been effective. In cases where it is accessible, it is expensive.

The case for mortgage ineffectiveness is a result of many underlying issues bedeviling our development as a nation. This article seeks to provide you with a creative homeownership option that is legitimate and efficient in achieving your real estate investment goal as an individual seeking to own a home.

The mortgage option requires you to provide equity of 20 – 30 percent of the total value of the home sale price. This also means that the home will be the collateral for the loan as you increase your equity over a period of years. Loss of income or ability to earn an income during the tenure of the mortgage translate in most cases to losing the home to the lender.

The loss of ability to earn income high enough to repay a mortgage is bad in itself. Losing that home to the lender makes it worse as you would have lost your homeowner status and in some cases, the equity.

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An alternative to the mortgage option is the invest-to-homeownership. It is a creative real estate investment option. It allows you to invest equity with a real estate business or private home developer. The equity is used to execute projects and turned over until the equity builds up to an agreed amount required to own your home. This option creates leverage that is not available in the traditionally popular options.

The invest to homeownership option is ideal when you do not have enough cash to buy a home in one fell swoop of payment. It also does not need you to pay interest. Instead, the returns on your equity accumulate towards your home purchase. The real power of compounding in real estate comes into play.

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Five major conditions that make invest-to-homeownership work

1. Your choice of the real estate developer

The developer must have a track record of executed and sold-out residential units. Invest-to-homeownership relies a great deal on the integrity of the developer. The first test of the integrity of a real estate entity is the track record and the quality of claims.

You should choose based on qualitative pieces of evidence and not emotions or appeal.

2. The project locations.

The developer must have ongoing residential projects in strategic locations of the city. These projects must be real and positioned to sell out. This is because not all locations are profitable for all kinds of real estate business goals.

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3. The readiness of the developer to work with you

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The developer must be desirous to accept your equity on respectable terms. This is because people management can sometimes be a tall order. If managing a bank loan will be easier, a developer may choose the bank above accepting to use your funds to execute projects thereby growing your homeownership equity.

4. Your mindset and belief

Many people, hold the belief that owning a home in Lagos, Nigeria is hard. This belief sets you up to miss creative opportunities.

Invest-to-homeownership option is a simple yet effective way to achieve a homeownership goal. A cheaper option that takes money out of your pocket fewer times than the popular mortgage option.

5. Ability to adopt and trust the process.

Your readiness as an intending homeowner and willingness to trust a transparent process when you find a developer who offers you one. The real estate investment terrain in Nigeria is still evolving. With many unpalatable experiences dotting the landscape. These experiences are due to a combination of several issues. Some real estate stakeholders have been able to master some fundamentals of the evolving terrain and can minimize foreseeable issues. Your ability to identify a trustworthy process, helps you harness the opportunity to own your home interest-free.

With the invest-to-homeownership option, the risk of losing your home to a lender in the case of protracted default or loss of income is eliminated. The developer that you choose to work with is obligated to deliver to the terms that will be agreed upon at the point of investment. You should carefully choose a stakeholder who can and will deliver on your homeownership goal in record time.

You may be interested or have questions about the possibility of the invest to homeownership option. In addition to letting you know this option is possible and available, we want to answer your questions too. Send ITHO via WhatsApp to 07062028677 or email to [email protected]

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Real Estate

NMRC, DLM issues N10 billion bond to boost affordable mortgage

The net proceeds will be used to refinance eligible mortgage loans originated by the participating mortgage lending banks.



NMRC, DLM issues N10 billion bond to boost affordable mortgage

The Nigeria Mortgage Refinance Company (NMRC) has completed its N10 billion 7.20% Series 3 Fixed Rate Bond to boost funding for affordable mortgage in the country.

The bond, which was facilitated by DLM Capital Group as the Financial Adviser and Issuing House, has created opportunity to investors and home seekers in Nigeria.

READ: #EndSARS: Access Bank announces N50 billion interest-free facility for businesses

According to the bond brochure, the net proceeds of the exercise will be used to refinance eligible mortgage loans originated by the participating mortgage lending banks, and investors.

The Managing Director/CEO of NMRC, Kehinde Ogundimu, explained that the bond was well received by investors, and was subscribed 3.28 times over the projected amount.

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He said, “This has been described to be the highest subscription for a Nigerian bond so far.

“This series 3 bond issuance goes to further reinforce our commitment to encourage, promote and facilitate home-ownership in Nigeria. This issuance gives an opportunity for people like you and I to take mortgage loans at an affordable rate and buy houses.”

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READ: CBN restarts dollar sales to SMEs, students, PTA

Ogundimu added that one of the biggest challenges in the mortgage industry is affordability, but with the rate at 7.20%, he expects that from the issuance, there will be a substantial decrease in the mortgage rate to the ultimate mortgagors going forward

“Other things like cost of houses is also expected to drop as this interest rate will offer some cost reduction to developers, unlike in the past where they had to borrow money for short periods at over 30% interest rate,” he added.

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What they are saying

Sonnie Ayere, the Group CEO, DLM Capital Group, explained that the success of the bond is an indication that it would go a long way in helping the average Nigerian access mortgages loans.

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He said, “The bond which was aimed at ₦10billion was oversubscribed and we received commitments for ₦32.8billion, this I believe is the highest subscription for a Nigerian bond thus far. This indicates a strong investor appetite for the long-tenured asset and re-emphasises the market’s confidence in the operating model of NMRC.

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READ: DMO offers N150 billion worth of FGN Bonds for subscription

“Also, we are cognizant of the housing situation in Nigeria and the challenges faced by Nigerians in accessing mortgage loans due to its high rates, so helping NMRC to achieve this gives us a sense of fulfilment as it will immensely help ordinary Nigerians access mortgage loans at low rates and ultimately help them buy their own homes.”

What you should know

NMRC was established to bridge the funding cost of residential mortgages and promote the availability as well as the affordability of good housing to Nigerians by providing increased liquidity in the mortgage market through the mortgage and commercial banks.

READ: Fidelity Bank to raise N50 billion in bonds in Q4 to refinance existing debts

The company is driven by substantial private sector participation consisting of commercial banks, primary mortgage banks, insurance companies, private equity investors and international financial institutions through the Ministry of Finance with the public purpose of developing primary and secondary mortgage markets, and raising long-term funds from both domestic capital market and foreign markets to provide accessible and affordable housing in Nigeria.

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