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.
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.
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.
NSE fines Mortgage bank, Conoil, others over N1 billion for account filing default
No less than 40 companies have been fine by the NSE for failure to comply with minimum listing standards of the bourse.
The Nigerian Stock Exchange (NSE) has fined Conoil Plc; Deap Capital Management & Trust, a Mortgage banker; R.T. Briscoe Plc; FTN Cocoa Processors Plc; eTransact International; Royal Exchange Plc and 35 others over N1 billion for their failure to file their financial statements with the bourse.
This was found in the NSE’s X-Compliance report that was released on April 1 2021. In the report, the NSE fined Deap Capital the sum of N5.5 million for default in the filing of its 2019 audited account, R.T.Briscoe was also fined about N53.4 million over its failure to turn in its audited report since 2018 to the Exchange.
Conoil Plc was fined N800,000, FTN Cocoa Processors was fined N50.3 million, Juli Plc, Omatek Ventures, Royal Insurance, Union Dicon, and Niger Insurance were slapped with N151.2 million, N537.2 million, N22.3 million, N27.5 million, and N84.2 million fines respectively among others for similar defaults.
What it means
The companies have failed to comply with minimum listing standards of the bourse as some of them have consistently failed to file their audited financial statements since 2017.
For instance, NGC, DN Tyre, Union Homes Savings & Loans, and Aso Savings & Loans have not sent their 2014 – 2019 audited results to the exchange. While Omatek, Evans, Unic Diversified, Juli, Anino, Multi-Trex failed to file their results since 2015. Roads, Staco Insurance, Goldlink, FTN Cocoa, Capital Oil, Guinea Insurance, Resort Savings, Standard Alliance Insurance, International Energy Insurance fall in the category of firms that have not submitted their 2017 and 2018 reports, respectively.
A regulatory report obtained at the weekend flagged the deficient companies with warning codes that indicated various degrees of corporate governance weaknesses, susceptibility to illiquidity, and price manipulation due to inadequate price discovery.
Some of the companies’ stocks were also on the delisting watchlist of the NSE.
What you should know
- The X-Compliance Report is a transparency initiative of the Nigerian Stock Exchange (The Exchange), which is designed to maintain market integrity and protect investors by providing compliance-related information on all listed companies.
- Companies that are listed on The Exchange are required to adhere to high disclosure standards which are prescribed in the Rulebook of The Exchange, 2015 (Issuers’ Rules), and other Rules of The Exchange, from time to time.
- Financial information which is periodic disclosure, as well as ongoing material information disclosure should be released to The Exchange in a timely manner to enable it efficiently perform its function of maintaining an orderly market.
- The X-Compliance Report is updated every Friday at the close of the market.
How to avoid losing money in real estate as a Nigerian
Below are seven tips to always keep in mind when buying real estate.
There are seven options for an individual to get on the real estate investment ladder. These options are:
- Buy options: outright buy with cash, buying through mortgage loans, joint ownership, co-ownership, joint tenancy, and exchange through barter.
- Transfer through marriage
- Takeover (acquiescence, Government acquisition, adverse possession, squatting, and laches)
- Accretion (reliction, improving another land and alluvium)
This article will focus on the most popular option for real estate entry which is the buy option. It is the option that is available to most people and the one with the least resistance. It is also one that exposes many people to loss – loss of money, time, energy and sometimes, lives.
Only a few people get to inherit profitable real estate, get real estate as a gift, or receive a piece of real estate through marriage. A piece of real estate given as a gift, inheritance, or in marriage most likely was first obtained by purchase.
As a first-time, repeat, or serial investor in real estate, the chances of exposure to a loss per investment is high but experiencing loss while entering real estate by buy option can be prevented. You do not have to be held in the jaw of a lion to know or believe that it devours. Below, are seven tips to always keep in mind when buying real estate.
Check your real estate investing knowledge
Ask yourself this question: What do I know about investing in real estate in the location that I wish to invest in? This is a very important question to ask if you want to prevent losing money in real estate.
That you were born in a place or a family involved in the real estate business does not mean that real estate investing skills come to you by default. Preventing loss and succeeding at real estate investing requires intentional learning.
The sales pitch should at best get your attention and not your cash immediately
The real estate market throws hundreds of sales pitches per time. A sales pitch is not bad in itself but it can be a potential trap. What is bad is for you to get overexcited about an offer and throw caution to the wind. For instance, you must check how exactly and when these benefits apply to you.
Having a clear picture of your investment goals backed up by a plan and sitting down to count the cost of investing before starting helps a great deal. Even when you want to bite more than you can chew, let it be with understanding and a solid plan. Hope is not a strategy.
Watch out for too good to be true deals
Real estate can offer low to very high returns – sometimes over a 100% ROI per annum. The ROI is different from the appreciation value. Some factors must be in place for return on investment to be possible at a certain level and frequency. A few of those factors are strategic location, the type of investment, and the structure of the investment.
When an offer looks too good yet, it interests you, take some time to think about the offer. Ask questions about the offer and get answers. The quality of your questions depends on what you know about real estate investing. This is why investment literacy is as important. Don’t be in a rush and don’t also delay.
A payment plan can sometimes be a trap
Due to the high entry capital required for real estate in Nigeria for instance, structured payment creates some ease for the buyer. Think through a structured payment real estate offer before accepting one. Even when it appears cheap, it may not be the right plan for you at the time.
How much are you prepared to lose?
Think about what you stand to lose when you cannot meet up with a structured payment plan, putting in perspective the other terms associated with investing in a piece of real estate. Can you stomach the risk? Are you prepared to invest what you can afford to lose? What will be the effect of the loss on your wealth goal or wellbeing? What recovery options are available?
It is okay to set up recovery plans before investing. Recovering part of your investment is much better than losing it all.
Understand the terms
Most real estate products come with an attached guide or document. Read the terms and conditions and understand it. Ask for interpretation where necessary. If you find anything that is not clear, highlight and email the company or the representative giving you an offer. Send emails so that you can have records to visit in the future. Investing in real estate with minimal loss relies on understanding the rules and law.
Check on the status of the company giving you an offer from time to time. This is to ensure that your investment is existent and protected as you fulfil all financial obligations. Companies may exist today and fold up the next minute. The earlier you can make your purchase stand-alone to the extent to which it can be, the better. This may mean getting your allocation done or taking possession as soon as possible. Get appropriate documents and register them.
Most people buying real estate in Nigeria will do so through a development company. There are hundreds of companies with a thousand offers. Choosing the best-fit offer can be a tall order. Yet, it is wise to know how to sift through these offerings if you are a smart investor. This way, you eliminate confusion and reduce the chance of losses.
Conducting thorough due diligence before buying any real estate offering is a way to sift offers. However, in a situation where there are many mouth-watering offers, a cost-efficient and effective system will be ideal. A system that gives you confidence in the offer you chose to buy. A system that allows you some level of control and one that you can use, rinse and repeat.
We have created an easy to use real estate offer analysis system. A detailed video guide series on how to analyze real estate offers before you part with money. It is smarter to know what real estate product to buy than trying to recover money after paying for an offer. Send REPAS (Real Estate Purchase Analysis System) via chat to +2347062028677 to indicate your interest in the free guide series.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Union Homes REIT proposes final dividend worth N465.03 million for shareholders.
- GT Bank Plc holds FY 2020 investors presentation.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.