In for a penny, in for a pound

In 2023, emerging markets appear to be in for another challenging year and may perform better than their developed counterparts – still convulsing from economic shocks, inflation, US rate movements and the Russia-Ukraine situation. Nigeria’s aviation industry continues to negotiate repatriating carrier receipts – dampening the hospitality submarket for internationals.

The Lagos University Teaching Hospital (LUTH) opened a ?1.5Bn, 60-bed, four-floor Oncology ward. The Federal Government established a 40-bed ultra-modern neonatal critical care unit and labour ward complex, for ?2Bn, and a 30-bed The Presidency completed a 120-bed mother-child hospital in Kaduna State. At the 140-bed Obudu German Hospital, the Cross River State Government partnered with Health Share Solutions of South Africa and Siemens Technology. Recent studies indicate that disposable income remains the most influential factor in determining housing prices in Nigeria. In the short and long run, house prices rose in response to an increase in disposable income, assuming stable macroeconomic conditions.

The Ebonyi State Government opened a ?36bn airport with free flights for state indigenes, for a limited time. Indigenous carrier – Air Peace's Embraer ERJ-145 planes were the first to fly to the airport. The government of Bayelsa State opened a 12.5km road in Akwa Ibom State. The Lagos State Government launched 876 housing units in three separate housing estates - in Gbagada, Odo-Onosa Ayandelu and Agbowa. All the estates boast contemporary infrastructure. Cold storage service provider - ColdHubs Limited launched a 30-tonne solar-powered Cold Room in Bodija market, Ibadan. Early-stage startups remain the most appealing to VCs, who seem to prefer small-ticket investments. Ventures Platform Fund led a $1m seed round for Lagos-based last-mile delivery service Fez Delivery(Techstars ‘22) , with Voltron Capital and Acasia participating.

In Lagos, Old Ikoyi, known for its aspirational assets, witnessed remarkable price growth with average land prices in 2021 standing at ?514,890psm. By 2023, this had surged to ?1.1m psm - a 113% rise. Victoria Island, a prime commercial and low density residential area experienced moderate but steady growth. On average, land prices rose from ?273,000psm in 2021 to ?516,000psm in 2023. This growth is partly due to sustained interest from corporate entities. Sangotedo, increasingly (and successfully) punching above its weight continued to enjoy attention from the Lagos state government, by way of infrastructure and developers, the latter keener than the former. transformation. In 2021, land was priced at ?22,964 per square meter. By 2023, this had surged to over ?48,000.

Lagos: Average land prices across locations (?’000psm)

Residential vacancy in Old GRA, Port Harcourt maintained a vacancy rate of 2% throughout H1 2021, and 2022, with a modest increase to 3% in H1 2023. The GRA 3 area experienced a vacancy rate of 6% in H1 2021, 8% in H2 2022, and 3% in H2 2023. These trends suggest the neighbourhoods' resiliency and attractiveness in the face of heightened security. Vacancy rates in both Elenlewo and GRA 2 decreased gradually. Elenlewo began at 6% in H1 2021, fell to 6% in H1 2022, and continued to decline to 4% in H1 2023. GRA 2 began at 2% in H1 2021, remained unchanged at 2% in H2 2022, and maintained this rate in H2 2023.

The Peter Odili and Woji residential areas, beneficiaries of the ongoing ?200bn ring road project, exhibited a variety of vacancy rate patterns. In H1 2021, Peter Odili's vacancy was 5% which then decreased to 4% in H2 2022, and then increased to 7% in H1 2023. In contrast, Woji began at 7% in H1 2021, fell to 6% in H1 2022, and then fell to 2% in H1 2023.

Retail performance in Abuja generally improved – even though basket sizes remain problematic. The vacancy rates at Apo Mall went from 17% in the first half of 2021, to 0% by H1 2023. Ceddi Plaza moved from 18% to 4% in the same time frame. In H1 2021, Jabi Lake Mall had an 18% vacancy rate. This dropped to 8% in H1 2022 and then steadied at 4% in H1 2023. Novare Central's vacancy rate was high at 27% in the first half of 2021. It went down to 13% in the first half of 2022 and then to 0% in the first half of 2023.

Download the full H1 2023 Nigeria Real Estate Market review report by Northcourt here: https://bit.ly/H12023nremr