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Lagos’ residential real estate market continues to evolve under pressure from rising property prices, limited housing supply, and growing demand from a young and increasingly urban population.
As affordability challenges deepen, alternative housing structures such as long-lease arrangements are gradually gaining attention as a middle ground between traditional renting and outright property ownership.
The long-lease model, which typically grants long-term occupancy rights over a fixed period, has been positioned by developers as a solution for households and businesses seeking stability without the high upfront costs associated with property acquisition.
However, the segment remains relatively informal, with limited standardisation and data to fully capture its scale within the broader housing market.
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In this interview with Nairametrics, Co-founders of RV Property Co., a real estate company with an active pipeline of long-lease residential developments across Lagos, Olabanji Olatomiwa and AL-Amin Abdulbhaqi, speak on the structure of the emerging long-lease market, demand patterns across key Lagos locations, pricing dynamics, risk allocation, and how the model is being positioned within the city’s wider housing ecosystem.
Nairametrics: How would you describe the current structure of the long-lease market in Lagos, and what segment of the housing market is it primarily serving?
Olabanji Olatomiwa: The long-lease market in Lagos remains largely informal and fragmented, with limited industry-wide data to accurately track transaction volumes, occupancy levels, or total market size. However, there is growing adoption of the model as an alternative housing solution, particularly in mainland Lagos where outright homeownership has become increasingly unaffordable.
The model primarily serves young professionals, diaspora Nigerians, middle-income families, and SMEs seeking long-term housing or business premises without the capital required for outright property acquisition.
Nairametrics: Based on your market data, where in Lagos are you seeing the strongest uptake of long-lease properties, and what location-specific factors are influencing that demand?
Olabanji Olatomiwa: The strongest uptake of long-lease properties is currently observed in Yaba, Shomolu, Surulere, and the Pedro/Gbagada axis. These locations benefit from strategic access to key commercial hubs such as Lagos Island and Ikeja, as well as strong demand from professionals, entrepreneurs, students, and SMEs.
Demand in these areas is driven less by luxury considerations and more by location efficiency, affordability, and long-term residential or business stability.
Nairametrics: What are the main factors currently driving interest in long-lease properties within Lagos’ real estate market?
Olabanji Olatomiwa: The primary driver of interest in long-lease properties is affordability, as rising property prices continue to push households and businesses toward alternatives that offer long-term stability without the capital burden of ownership.
Additional drivers include urbanization, diaspora interest in securing accommodation, and growing awareness that housing access does not necessarily require ownership. The model also appeals to young families seeking predictable housing costs without exposure to frequent rent increases.
Nairametrics: How is a typical long-lease development in Lagos structured financially from inception to completion in terms of revenue generation?
Olabanji Olatomiwa: A typical long-lease project begins with land secured under a Build-Operate-Transfer (BOT) arrangement, where landowners contribute land while developers handle planning, approvals, construction, marketing, and delivery.
Revenue is generated through lease subscriptions paid for defined occupancy periods, typically between 15 and 20 years. Pricing for units such as studios and one-bedroom apartments generally ranges from N10 million to N15 million and N18 million to N30 million respectively. The success of the model depends on efficient execution, strong occupancy levels, and sustained market demand.
Nairametrics: What are the key responsibilities and financial exposures of the developer throughout the full lease cycle in a long-lease arrangement?
Olabanji Olatomiwa: The developer carries full responsibility across the project lifecycle, including land sourcing, design, regulatory compliance, construction, marketing, facility management, and legal documentation.
Financial exposure includes construction cost inflation, financing costs, project delays, demand fluctuations, occupancy risk, regulatory changes, and reputational risk. Since subscribers acquire long-term occupancy rights rather than ownership, the developer’s credibility and execution capacity are central to sustaining trust in the model.
Nairametrics: How are land access or land contribution agreements typically structured between landowners and developers in Lagos long-lease projects?
Olabanji Olatomiwa: Land access is typically structured through a contribution arrangement where landowners provide land while developers bring capital, technical expertise, approvals, and project execution capacity.
Commercial terms vary depending on the project, but both parties agree on how value and responsibilities are shared. The landowner retains underlying ownership while allowing development to proceed under agreed terms, with clear documentation required due to the long-term nature of the arrangement.
Nairametrics: What commitments and benefits do subscribers typically take on in a long-lease model compared to outright purchase or traditional rental arrangements?
Olabanji Olatomiwa: Subscribers commit to a defined lease period and agree to operate within the terms established by the lease agreement, which grants long-term occupancy rights rather than ownership. In return, they benefit from greater stability compared to conventional rental arrangements that are subject to periodic rent increases.
The model also offers relatively lower entry costs and improved access to desirable locations, making it attractive to users who prioritise long-term use and residential or business stability over outright property ownership.
For investors who intend to use these units as cash-flow assets, the structure can also support quicker capital recoupment and longer-term rental income potential, given the lower entry threshold compared to full property acquisition.
Nairametrics: How are long-lease pricing decisions made in Lagos, and what key variables determine the pricing structure you see in the market?
AL-Amin Abdulbhaqi: Pricing is determined by factors such as location, land value, construction costs, infrastructure quality, lease duration, market demand, facility offerings, and expected maintenance obligations.
Properties in well-connected urban corridors typically command higher pricing due to demand for accessibility and convenience, while longer lease durations also influence pricing levels.
Nairametrics: How is risk distributed between developers, landowners, and subscribers in Lagos long-lease projects, and what assumptions usually underpin long-term projections?
AL-Amin Abdulbhaqi: Risk is distributed across stakeholders based on their roles in the project. Developers carry development, construction, financing, delivery, and market risks, while landowners bear the opportunity cost of committing land to long-term use.
Subscribers assume occupancy and contractual risks associated with the terms of their lease agreements.
Long-term projections are generally based on assumptions around population growth, housing demand, infrastructure development, inflation, occupancy levels, and broader economic conditions.
Nairametrics: How are long-lease agreements in Lagos typically structured at the end of the lease term, and what outcomes are usually available to subscribers at that stage?
AL-Amin Abdulbhaqi: At the end of the lease term, the arrangement generally follows the principle of reversion.
This means that the occupancy rights granted under the lease expire, and the interest reverts to the underlying landowner or estate owner in accordance with the terms of the agreement.
For that reason, one of the most important responsibilities of developers and brokers is ensuring subscribers fully understand what happens at lease expiry before entering into the transaction.
Transparency around the end-of-term outcome is essential for maintaining trust and protecting all parties involved.
Nairametrics: What legal instrument governs subscriber rights over the 15–20 year lease period, and how are those rights registered or enforced under Lagos property laws?
AL-Amin Abdulbhaqi: Subscriber rights are governed by a Deed of Sub-Lease, which clearly outlines the subscriber’s rights, obligations, duration of occupancy, and the terms of the lease arrangement.
To further strengthen and protect these rights, the Deed of Sub-Lease may be registered with the relevant authorities at the Lagos State Ministry of Lands. Once executed, the agreement becomes a legally enforceable document, allowing subscribers to assert and protect their interests through the legal and regulatory frameworks governing property transactions in Lagos State.
Nairametrics: How is pricing determined for long-lease units, and over a 15–20 year period, how does the total cost compare with renting a similar property in the same location?
AL-Amin Abdulbhaqi: Pricing is determined by several factors, including the property’s location, development cost, unit type, expected rental value, lease duration, and projected maintenance obligations over the lease term.
When compared with traditional renting, a long-lease arrangement typically offers significant cost savings over a 15–20 year period. Rather than being exposed to annual rent increases, subscribers secure occupancy rights upfront at a fixed cost. In many cases, the cumulative cost of renting a similar property over the same period can exceed the long-lease acquisition cost, particularly in high-demand locations where rental inflation is strong.
