Lagos shortlet boom puts operators under pressure as supply keeps rising

Shortlet operators in Lagos may face increasing pressure as more properties enter the market, making scale, cost management and marketing important to remaining competitive, according to Temidayo Oloyede, Co-founder and CEO of Edala Development.

Oloyede stated this during a question-and-answer session at the Edala Investor’s Summit 2.0 held in Lagos on Saturday.

The comments come as the number of shortlet apartments in Lagos continues to grow, with property owners and developers increasingly targeting the short-term accommodation market.

What they are saying

Oloyede said rising supply would not affect all operators equally, arguing that the quality of management and ability to control operating costs would determine how businesses perform as competition increases.

• “I always tell people that me and you can own shortlet in Lekki Phase 1 and perform better than you. Why? Because we are in the same market. It’s the quality of the person running the business,” he said.

He said operators with multiple properties could have more capacity to absorb costs when competition puts pressure on occupancy and revenue.

• “For us, generally, if there’s a saturation of the market, we will not be affected because, first of all, we are managing more projects. We have enough shock absorber for our costs,” Oloyede said.

He also said operators would need to compete more aggressively for customers as the number of available properties increases.

• “We can pay influencers aggressively. If there are 10 shortlet properties in Surulere, we want to be at least five out of the 10 apartments that people want to book,” he said.

Samuel Olatunde, COO and Co-founder of Edala Development, said occupancy across the company’s properties ranges from about 59% at the lower end to 80% during peak periods.

He said demand is typically stronger between December and February, while some property owners prefer to sell shortlet units rather than operate them because of the demands involved in running the business.

Data gap limits market assessment

Olatunde said the lack of reliable industry-wide data makes it difficult to establish whether Lagos’ shortlet market has reached saturation.

• He said limited data on the size and economic contribution of Nigeria’s hospitality sector makes it difficult to compare the number of available
• shortlet units with actual demand.
• As a result, occupancy rates reported by individual operators cannot necessarily be used to determine the performance of the wider market.

The issue is particularly relevant as more property owners and developers enter the shortlet segment, potentially increasing competition for the same pool of customers.

Oloyede said the increased competition could expose operators whose business models are not sufficiently sustainable to withstand weaker demand or rising operating costs.

Get up to speed

Nairametrics’ earlier investigation found that Lagos landlords and property investors were increasingly moving from conventional rentals into shortlets, attracted by higher potential returns, reduced tenant-related risks and demand from Nigerians in the diaspora.

However, operators interviewed by Nairametrics also pointed to growing competition as more properties entered the market.

• Some said the 2025 Detty December period was tougher than previous years as new units spread demand across more apartments, while bookings dropped sharply after the first week of January 2026.
• The investigation also found that operators were responding by investing in better furnishings, professional management, premium amenities and other features to differentiate their properties and attract repeat bookings.
• The growing supply has therefore created a more competitive market, with occupancy, pricing and the ability to stand out becoming increasingly important to shortlet operators.

In February 2026, the Banana Island Property Owners and Residents Association prohibited shortlet and Airbnb-style rentals within the estate over security and privacy concerns.

What you should know

Lagos’ shortlet market has become a more structured segment of the city’s real estate economy, with occupancy levels, operating costs, location and guest expectations increasingly influencing pricing and performance.

• Some operators say a shortlet apartment now needs to record at least 10 booked days each month to remain commercially viable, as the influx of new investors has intensified competition across the market.
• Some operators are increasingly relying on shorter bookings to meet occupancy targets that were previously easier to achieve.
• Two-bedroom apartments remain among the more sought-after categories, offering flexibility for business travellers, leisure guests and families.

Operators are investing in furnishings, backup power and hospitality-style amenities to differentiate their properties and attract guests.