Nigeria: 2016's next big hotspot?

Lagos, Nigeria

Knight Frank has highlighted Nigeria as the next big hotspot for international investors this year.

The country's economy is robut, which is attracting growing interest from overseas, says the agency, with the expanding population significantly driving demand for housing. Lagos and Abuja are singled out as particular hotpots, with both among eight cities with populations of over one million.

Paul Philipp Hermann, Co-Founder and Managing Director of real estate portal Lamudi, which focuses on emerging markets, comments: "Africa is expected to see a rapid rate of urbanization, with a 16 percent increase in its urban population by 2020."

"By most estimates, Lagos has already overtaken Cairo as Africa’s biggest city and its population may be close to 40 million by 2050, making it a true global megacity," adds Knight Frank.

Now, prime office rents in Lagos are among the highest in Africa, with only a handful of buildings able to provide high quality space. Abuja is a modern planned capital city which is seeing increased development activity, including the WTC Abuja scheme.

"The Lagos residential market is showing signs of increased activity, even at the top end of the luxury market, which is characterised by apartments in Ikoyi priced in excess of US$1 million," writes MENA Researcher Diaa Noufal.

"Concurrently, the mid-market is also performing positively, with well-priced and well-located estates selling quickly off-plan."

The country's agriculture, industrial, communication and financial services sectors are also helping to attract other Gulf investors, especially Saudi Arabia.

Foreign investment in the Nigerian property sector is "still modest",considering the size of opportunities, concludes the agency, but international investors are "more and more positively weighing the improving investment scene in the country".

"Investing in the Nigerian property sector provides comparatively high yields, coupled with increasing capital values across all property asset classes, whether offices, industrial, residential or retail."