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Short-stay apartments record boom, amid COVID-19 second wave fears

As most hospitality businesses suffer due to the adverse effect of the COVID-19 pandemic, short-stay apartments seem to be witnessing a boom.



Short-stay apartments record boom, amid COVID-19 second wave fears, Real Estate Investment Trusts

2020 has been a devastating year for the Nigerian economy, especially the hospitality industry, with hundreds of people laid-off and salaries of some workers slashed.

Interestingly, as the big-wigs in the industry continue to grapple with the economic impact of the Covid-19 pandemic on their patronage, smaller boutique hotels (short stay apartments) are witnessing a boom during the Yuletide season.

READ: Hotels in Nigeria are on the verge of collapse

While the average price of 1-bedroom flat short-let in Lagos is N35,000 per day, the most expensive flat costs N80,000 per day.

Their location, especially in Lagos is also an attraction to their patrons, with range of choices from Ikeja, the state capital; high-class areas like Magodo; Chevron Drive, Lekki Phase 1; Oniru, Victoria Island; to Surulere areas of the nation’s commercial hub.

READ: COVID-19: Abuja Sheraton suffers 88% drop in revenues

Expensive but safer, flexible and functional – Patrons

Akinwole Adekoya, who is based in Qatar, United Arab Emirate (UAE), is one of the patrons of the short-let apartments in Lagos.

According to him, he usually visits his family every Yuletide season but had to stay at one of the apartments close to Lagoon School, Lekki Phase 1, where he pays N80,000 per day.


Before he chose the apartment, he told Nairametrics that he saw an apartment where he was asked to pay N450,000 per calendar month off Marwa within the same area, which he rejected.

READ: As Hotels resume operations, how prepared are they?

“Though, some people may think it’s expensive but I prefer it because it is safer compared to the conventional hotels, where you don’t know the Covid-19 status of people around you.

“I decided to stay at the apartment because I needed to isolate myself for about two weeks in order to keep my family safe. The room is just like home-from-home experience, as I have everything to myself including the kitchen. 

“Even before COVID-19, I use them whenever I go to Abuja, largely because of their privacy feature. While cheaper hotels are accessible, I prefer the apartments due to their home away from home feel.”

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READ: COVID-19: Transcorp Hotel loses about N1 billion every month – CEO

Abuja based Engineer who craved anonymity, prefer the apartments around Oniru, VI; and Magodo Phase II, anytime he is in Lagos because of special features like privacy, functionality, flexibility, and comfort of a high-end home, along with the efficiency of hotel services.

“Some of them have increased their rates to stay in business, especially during the pandemic. The last time I came to Lagos for four days, I first checked an apartment on Airport Road, which had gone up from N20,000 to N30,000.

READ: Nigerian hotels count revenue losses due to pandemic-induced plunge

“I finally chose one at Magodo Phase II, which had also increased from N15,000 to N20,000. That is because of the serenity of the environment and the incentives they offered. They dry cleaned my clothes for three days free of charge and I have decided to use the facility anytime I am in Lagos.”

These patrons are only two out of hundreds of Nigerians that preferred the services of the short-let apartment due to the flexibility, amongst other functionalities.

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READ: Airbnb release its prospectus to debut on Nasdaq Stock Exchange

Revenue is steady, ticking up and good investors

Olajide Abiola, Co-founder and CEO, Smart Residences Ltd, operating as Gidanka, told Nairametrics that despite the COVID-19 pandemic, the revenue generated from the apartments has been steady because of the excellent service reputation earned within the short period.

According to him, Gidanka has facilities across four neighborhoods in Abuja cityspace, Lagos and still counting.

READ: Why investing in Airbnb might be worth it


He said, “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.”

On the source of fund, he told Nairametrics that his company secured N1.07 billion in seed funding, and have been able to lease out properties in four neighborhoods, to provide 86 unique spaces in about a year.

READ: Airbnb releases $250 million relief fund to help affected hosts

“We have hosted travelers from over 12 countries, and have paid over 70% 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.”

Another investor in the industry, Lekan Okueyungbo, who owns apartments in Maryland and manages another in Lekki (Chevron axis) for a friend, explained that traditional hotels with their limited spaces birthed the increasing demand for the services of the short-stay apartments.

READ: Siemens’ $2 billion power deal to save Nigeria over $1 billion annually – FG

He said, “This is an emerging industry across major commercial cities in Nigeria because the investors ensure the apartments are positioned in new and fascinating locations.

“From my observations, the demand for our services increased especially during COVID-19 pandemic/lockdown. About three of my friends that said the business is not lucrative pre-COVID called me and asked if I could help manage or consult for them.

READ: Drive-ins, photo shoots, outdoor catering, hotels in Nigeria adopt new ways to survive

“Most of our rooms are fully booked sometimes for days. Sometimes, customers book a day or two ahead just to be assured of a room whenever they need one.”

What you should know

  • Last September, Nairametrics reported that the rise of the 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 2020, occupancy rates have picked up to pre-pandemic levels.
  • 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.


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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Exclusive: New airlines to emerge in Nigeria, as NCAA vets 23 more applications

While some new entrants have expressed interest to commence ownership of airlines, others have reached various stages in the acquisition of their Air Operators Certificates (AOC).



Aviation, Airline operators will pay $3,500 per passenger if they break protocols – PTF COVID-19, Global Air passenger slump to persists til 2023- Moody’s 2023- Moody’s

It appears that the Nigerian aviation sector has defied the norms, as about 23 airlines (investors) are currently seeking to start their operations in the most populous black nation.

This was disclosed by the Nigerian Civil Aviation Authority (NCAA) in an exclusive interview granted Nairametrics by its General Manager, Public Relations, Sam Adurogboye.

While some new entrants have expressed interest to commence ownership of airlines, Adurogboye disclosed that others have reached various stages in the acquisition of their Air Operators Certificates (AOC).

READ: Why new airlines find it difficult to get certified, fly in Nigeria – NCAA

Some of the airlines are NG Eagle and Green Africa Airways, which have reached an advanced stage in the acquisition of an AOC. Rano Air, Northeast Shuttle and a host of others have expressed interest too but are still being considered.

He said, “We are currently treating and vetting about 23 applications. More are still coming to operate in Nigeria because they know and believe that there are several opportunities in the sector. Most importantly, a lot of them have seen the way safety issues have been tackled in the sector recently. These are the factors that must have boosted investors’ confidence in Nigerian airspace.

It’s a good thing to desire to come onboard. The process is a black and white thing. What you need to do in one phase to go to second, second to third, you fulfil it and the team that is in charge work as a team. It is not by the Director-General at any particular time. It’s a team of engineers, airworthiness inspectors, medical. It’s a team and nobody can influence the other.”

READ: The man singlehandedly changing the aviation industry narrative


What they are saying

However, aviation experts appeared worried arguing that the nation does not need more airlines but big body aircraft, a friendly business environment and access to cheaper funds.

An Aviation Consultant, Muyiwa Lucas, told Nairametrics in a recent interview that what the nation needs are big body aircraft, as they can take more passengers and favourably compete with foreign counterparts, who seem to have an edge over them.

He said, “Currently Nigeria is experiencing low capacity. There are not enough aircraft seats to meet the demand of passengers. If airlines use bigger aircraft that can take more, it is cheaper than two or three airlines plying the same route and at the end of the day, they are not filled. So many people would want to fly now considering the security threats on the road; and air travel is also the fastest, safest and most reliable means of travel.”

READ: Airfares across Nigeria increases by 100%

Another hurdle that curbs growth in the industry is cheap credit. Capt. David Olubadewo, Managing Director, Starburst Aviation Limited and a Nigerian based in the UK, explained that most of the airlines and other industry stakeholders could not access cheaper loans because banks believe that the sector is too difficult to invest in.

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“But that is wrong. It is not different from other sectors. We are all in it to make a profit at the end of the day. I don’t obtain loans from Nigerian banks, because I will end up with a 25% loss or more, but that is not happening in the UK where I pay far less interest rates.

If I take such a loan in Nigeria, it means I am -25 percent (interest rate) in red, and by the time you get to the top, you are owing millions. I cannot approach any of the banks to give me local money to do business in Nigeria. If I can go through that, you can imagine the experiences of the airlines.”

READ: Nigeria owes foreign airlines $53 million as proceeds from ticket sales – IATA

What you should know

Last March, Nairametrics reported on the stages airlines need to cross before they can secure their AOCs in Nigeria.

Phase 1 – pre-application phase:

The NCAA will appoint a certification team and process the pre-application statement of intent form (AC-OPS 001). Discussions on all regulatory requirements, the formal application and attachments and any other related issues will take place. This is usually a week’s process.

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Phase 2 – It involves a formal application for intending entrant where documents and manuals (including the curriculum vitae of key management personnel) must be submitted for evaluation. The minimum timeframe for the formal application phase is two weeks.

Phase 3 – It is a document evaluation phase where the NCAA will review the applicant’s manuals and other related documents and attachments to ensure conformity with the applicable regulations and safe operating practices. The minimum time frame for the document evaluation phase is three months.

READ: Cargo handlers record higher revenues despite airline crunch

Adurogboye added that the processes is simple and straight forward enough and the requirements are not meant to deter any investor. Contrary to that, they are meant to show capacity for safety for the particular operations to be embarked on.


He stressed that new airlines only come on board once they have fulfilled all the requirements in the staging process stating that the most critical of those stages are stages three and handing over the AOC to the operator.

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Crypto may suffer setbacks, remain trading within speculative confines except … – DLM Capital CEO

A domestic investor should focus on companies that have either better endured or increased their sales channels beyond the pre-pandemic levels.



Several Nigerians, including Vice President Yemi Osinbajo, have called on the apex regulators of the banking and Financial market sectors, the Central Bank of Nigeria and the Securities and Exchange Commission (SEC) to implement a regulatory framework for Cryptocurrency transactions in the country.

In this interview with Nairametrics, Sonnie Ayere, the Group Chief Executive Officer of DLM Capital Group, a firm that has been at the forefront of creating alternative financing solutions for businesses and providing bespoke innovative ideas to access funds for growth, bared his mind on the subject.

To him, without a status of cryptocurrency as a medium of financial exchange by the majority, it could suffer setbacks and remain trading within speculative confines related to commodities, like gold.

READ: Crypto crash: 3 major risks involved in investing in Crypto

What growth trajectory do you predict for the Nigerian economy in 2021 after recovery from recession?

We believe that the post-recession economy for Nigeria in 2021 would reflect significant growth as the effects of the Covid-19 pandemic on the economy wanes with the resumption of vaccinations to beat back its spread. Businesses requiring customer visits were most severely affected in 2020 by lost patronage. While manufacturers, and marketers alike, carried on with stable, unthreatened production levels and supply of goods; the challenge was how to get customers to pick and purchase them. This inspired a rise in demand for delivery options, by both customers and sellers; thus, we have indications of further potential in new and existing delivery and logistic companies, online retailing, and online payments for sales beyond fixed locations or outlets.

We expect the post-recession economy to exceed its current state in economic performance as this is a state for which most movement restrictions have been eased, and the conduct of business for physical transactions has resumed. We believe that the earlier formed opinions on the Nigerian economy forecasted a more than a transient period of recession relative to other countries facing the same. We believe this was premised on significant negative expectations of anticipated weak responsiveness from the government, high infection rates and perceived challenges of financing and management of the pandemic.

READ: Here’s what should be expected in Nigeria’s fixed income market this week


The year 2021 resumed with increased activity in the global economy which has induced higher price levels for commodities following a rebound in demand. In Nigeria’s case, this is relevant to the nation’s Crude Oil exports. Nigeria is again opportune with increased revenues and a chance to increase its savings.

Despite the disruption triggered by the COVID-19 pandemic, Agriculture, ICT and Financial Services sectors have remained resilient. What do you think is responsible for this and which sectors do you see driving further growth in 2021?

For these three sectors mentioned, the most profound contributions came from the ICT services, because it largely facilitated greater levels of transactions for the financial sector particularly with regards to growth in electronic payments and online merchandising. Agriculture particularly thrived as supply chains faced little threats with movement restrictions, and unlike most other sectors, enjoys steady demand. The prize for value should go to ICT related services for easing the sales of goods and services away from physical markets where people would ordinarily transact.

The Federal Government has presented a budget estimate of 13 trillion with a historic deficit of N5 trillion. How realistic do you see the 2021 budget in line with the assumptions?

Overall, higher oil prices translate to stable expectations on financing with crude oil production and sales. The expectations of performance from that should be covered with increased global energy consumption. Higher revenue from sales also affords the country a greater capacity to service future debt financing payments, which also translates to lower borrowing costs.

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What would be critical is the government’s success in increasing tax revenues in the face of depressed economic activity and its ability to raise debt and conduct asset sales if needed.

What is your assessment of the investment climate in Nigeria on the back of COVID-19?

The Investment climate in Nigeria following the Covid-19 outbreak is shaped to reflect the economic situation following the impact felt within average households, and these are lower average earnings per household, a reduction in businesses that can breakeven, and a need for preserving wealth.

For the Financial Markets, the trend is of lower yields for all fixed-income investments; these span government treasury bills and bonds, corporate debt, that is commercial papers and corporate bonds, and even rates on bank deposits. For the stock market, 2020 featured a strong rally though corporate performances were varied, clearly reflecting differences in customer patronage of underlying sectors. We believe it was a clear search for yield as many companies offered attractive dividends relative to their trading prices.

What will be the outlook for the Nigerian fixed income market in 2021 in terms of the regulatory landscape and opportunities for investors?

For the fixed income market for 2021, we anticipate an increase in corporate issues from companies familiar with the financial market and “in-pipeline” transactions from new corporate prospects. The focus would be access to the current lower market rates at different tenures and refinancing their existing debt at these lower rates. We expect to also see increased issuance of commercial paper to shore up working capital for financing inventory.

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We anticipate support from our regulators as we push for the inclusion of more companies into the opportunity space for all stakeholders in our domestic financial markets. However, there appears to be a push for higher rates by the main buyside operators, hence an increase in FGN yields.

The Nigerian equity market was on a rally that triggered a circuit breaker on the NSE recently, what does this mean for the market’s outlook?

The impressive rally of equities in 2020 was triggered by investors searching for higher yields. It is only rational that some investors would reconsider their aversion for stocks and seek the upside offered by rich dividend income relative to fixed income investments at the time. Institutional investors have for a recent while favoured fixed income and backed down on taking on equities; fixed income yields in the market had sufficed for the performances of their managed portfolios. We have seen this change with the rally and we do hope for better corporate performance to sustain strong fundamentals for each component industry represented on the Nigerian Stock Exchange All-Share Index.

From an investment perspective, what investment options would you advise investors (retail and institutions) to focus on in 2021?


2021 presents opportunities for value investors as some domestic company stocks remain undervalued relative to similar companies in other foreign stock markets. A domestic investor should focus on companies that have either better endured or increased their sales channels beyond the pre-pandemic levels.

In the fixed-income space, it is important to note that upcoming deals will seek to capitalise on current market offered rates as some sectors of the Nigerian economy ease back into profitability under rising economic activity. Current traded debt securities would be more attractive and priced to yield lower based on improvement in economic conditions.

The theme for investment should be the location of the business front. Many location-based businesses that an individual would traditionally visit to view and purchase merchandised products have had to step up on selling efforts by expanding sales channels beyond their physical location by way of promoting brands and products via social media, their e-commerce sites and offering online options of delivery and payment.

The frontier for distribution has been stretched to include mobile devices with online payments; investors must seek where revenues are secured with a focus on distribution costs.

What is the future of crypto regulation in Nigeria, and what are the gains of Nigeria adopting a digital currency?

Ultimately on admission as an acceptable medium of exchange; some form of regulation under the ambit of the monetary authority and the securities exchange commission would be handed down to manage its effects on the economy as currencies do. The adoption of cryptocurrency as an acceptable medium of transactions included in monetary resources across more countries would most likely precede its adoption in Nigeria; we do feel these would be soon addressed by individual countries and the International Monetary Union as full adoption of cryptocurrencies quite literarily portend some displacement of currently accepted international currencies in international trade, a development member countries which own the major currencies would most likely resist; and of course, countries with currencies out of this group, would most likely support.

Without a status of cryptocurrency as a medium of financial exchange by the majority, it could suffer setbacks and remain trading within speculative confines related to commodities, like gold.

Some critics have argued that there are other ways for the CBN to curb illegal transactions instead of placing a ban on crypto transactions. What is your take on this?

There is no argument that there are other ways to curb illicit flows, but with an unregulated status, it would be natural for the apex bank to view some transactions as ‘rogue’; that is, operating without oversight, controls or data on source and destination of transactions. Until the monetary authority props its infrastructure to monitor and regulate this, cryptocurrencies would be seen to support parallel transaction ecosystems.

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