The fast-growing young population of Nigeria has largely defined the country’s commercial capital. At 3,577 km2, Lagos has the smallest land area in Nigeria and is 21x smaller than Nigeria’s largest state; Niger.
Despite its size, the state houses the country’s largest population and arguably ranks 1st among Africa’s most populous cities. While this fast-growing young population might tell an exciting growth story, we can’t deny the socio-economic pressure it places on the state’s infrastructure and housing.
As you’ll expect, renting in Lagos can be quite difficult and expensive, particularly in areas with proximity to the city’s commercial centre; Victoria Island. Housing in these areas is gradually adapting to demand which is largely from people within the ages of 18-35. They typically demand for 1-bedroom or studio apartments and would not mind paying a premium for key additional services including quality facility management and proximity to work.
How can developers leverage this demand?
1. Serviced Apartments: Serviced apartments are gradually gaining a bit of traction in key areas in Lagos. They are typically smaller-sized apartments furnished with a bed frame, wardrobe, air conditioner and kitchen furniture. They also enjoy building facilities including security, inverters, standby generators, depending on the rental range and level of sophistication.
Developers can attract more tenants to their building by introducing additional facilities at a slightly higher rent. The shift to remote work has also strengthened the case for serviced apartments as tenants spend more time indoors and enjoy more of these facilities. Winning with serviced apartments would require quality facility management as prospective tenants have cited this as very pertinent in making their decision.
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2. Shared Apartments: Multiple-room apartments can have each room rented to different tenants as it could be quite difficult finding one tenant to take up the whole space. These types of apartments could be the right fit for young people willing to explore, meet new people and split responsibilities. Muster and Fibre are two easier-living solutions that support apartment sharing. Landlords can list their properties on these platforms to secure interests from prospective tenants interested in sharing apartments.
3. Larger Formal Retail Developments: The growing urbanization in key areas in Lagos is driving opportunities for formal retail developments. In Yaba for instance, demand is currently satisfied through informal markets, small retail shops and a couple of supermarkets including Mallmart and SPAR. The closest to formal retail is E-Centre, completed in 2008 and home to Ozone Cinemas and a couple of other retail stores.
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The urbanization, fast-growing population and presence of key educational institutions in Yaba present opportunities for more organized retail as seen in Surulere and Maryland with Adeniran Ogunsanya Mall and Maryland Mall. Establishing a formal retail centre could leverage this demand and help solidify Yaba’s presence in Lagos’s exciting story.
In 2050, Nigeria will be the 3rd largest country in the world after India and China and have the 2nd lowest median age among Africa’s largest economies. Going by current data, we expect a fairly large percentage of this population to reside in Lagos. This means Lagos will continue to be young and vibrant and we can trust this demographic composition to shape its housing requirements for more 1-bed apartments.