Lagos may lead the pack in commercial and real estate activities in Nigeria but when it comes to property prices, in Abuja it is a different ball game altogether.
Lagos may lead the pack in commercial and real estate activities in Nigeria but when it comes to property prices, in Abuja it is a different ball game altogether.
Real estate in Abuja may not rival that of Lagos in terms of vibrancy but returns on investment are equally as high as in Lagos and even higher on rentals. The demand for rented property in Abuja has driven prices to a record high and has begun to attract more investors. Already, some investors have seized the opportunity to invest and are getting good returns.
The Federal Capital Territory, Abuja, is said to be the fastest growing city in Nigeria, growing at 9.4% per annum, ahead of Lagos (6-8%) and Kano (3.3%), the two largest cities in Nigeria, according to the last census figures. The demolition exercise slowed down real estate activity in Abuja for a while, causing investors to hold back.
With the stoppage real estate activity has picked up again. Getting secure (free from demolition threat) property, particularly land, now makes it easier to build and dispose of either through rental or outright sale. However, the market revival seems to be in favour of middle-income earners, who are now the toast of property owners.
Places to Consider
Kubwa, Maitama, Karu, Jabi Utako district, Asokoro, Kuje, Lugbe and other areas within this bracket are areas with renewed investment interests. The central business district, which is also the market for commercial property, is not left out. Some of the areas mentioned above were formerly considered only good for low-income property, but all that is changing now with the rate of development taking place in Abuja.
Karu
Karu is located in the outskirts of the main city, FCT, and is one of the best satellite towns in Abuja in terms of road network, quality of building, and planning. Karu leads you to Nassarawa State, and can be accessed from FCT through Asokoro district. It shares a boundary with Nassarawa State and Mararaba. A 2-bedroom flat in Karu goes for between N300,000 and N400,000, while a 3-bedroom flat is between N400, 000 and N550, 000, depending on the quality of finishing and taste.
A 1,000m2 land goes for about N5 million or more, depending on the location. Karu is about three to four minutes drive to Asokoro when the road is free. However, traffic can be heavy in the mornings when workers are going to work and during closing hours, because it is a major link road to adjoining states and towns on the outskirts, such as Nyanya, Mararaba, Jikoye, Lafia and others. However, the road is broad and tarred.
Kubwa
Kubwa is located on your way to Abuja from Suleja. A realtor described Kubwa as the Lagos of Abuja because of its busy lifestyle, which is similar to that of Lagos. Though it is one of the areas that suffered heavily from the demolition, real estate has taken a different shape in Kubwa. A single-room apartment that went for N40,000 before the demolitions now goes for N70,000 or more while a room and a parlor that went for N80,000 has shot up to N150,000. This increases spread across all property type.
Utako & Jabi
These are both high and medium income areas. They boast scenic views and good roads. The rents are moderate. Jabi also boasts an artificial lake. Land around these areas are hot and the houses have beautiful architecture. A one-bedroom flat in Utako and Jabi starts at N300,000, a two-bedroom flat N500,000, and a three-bedroom flat N600,000. A three-bedroom detached apartment starts at N1 million and N1.2 million for a four-bedroom detached house.
Kuje
Kuje is the closest area council to the major city. The major road has been rehabilitated and redesigned and now has a number of intra roads for easy access to the FCT. A major road under construction links Kuje with APO legislative quarters, and a direct link road from Kuje to Gwagwalada also exists but in a poor state. It is also the closest to the airport, thereby making Kuje a focal point for future entrepreneurs and investors even as banks and other businesses move in there.
Land value in prime areas starts at N1 million. Rent in Kuje is fairer when compared with other areas in Abuja. A studio room goes for between N50,000 and N100,000, a single-bedroom flat starts at N120,000 while a two-bedroom apartment begins at N180,000. These prices depend on the finishing and functional design of the property in question. Property experts believe that prices are likely to rise by 50% or more over the next two to three years.
Lugbe
Lugbe is located along the airport road just after the city gate, with lots of estates along its axis. Lugbe is predominantly a government estate. Land at Lugbe is moderate considering the price of land in Abuja. Prices start at N1 million but on the average you can get a 1,000 sq. metre piece of land for N2-N2.5 million while prime areas are as high as N6 million. Lugbe’s location and good traffic situation makes it an attractive property market.
Other upcoming areas are Prince and Princess Estates, Gudu, Gaduwa, Games Village, Gwarinpa, and Mabushi. Demand for property in these areas is on the increase as more investors become aware of the potential in them.
But in the heart of the city, prices for these same properties are much higher. A realtor with a leading real estate firm confirmed that in some parts of the main city a one-bedroom apartment go for as high as N250,000 per annum, and a three-bedroom costs about N800,000 per annum.
Demand and growth drivers
Business expansion
Recently, Intercontinental Bank, a leading Nigerian bank, announced plans to open up 25 new branches in Abuja that will spread across Kubwa, Gwagwalada, Kuje, Maitama and other neighbouring towns. Afribank Nigeria had also announced the opening of 29 new branches across the nation, although specific locations were not mentioned, Abuja will, no doubt, benefit. Other banks and businesses are spreading their reach to the Federal Capital Territory in a bid to grow their businesses and capture the Abuja market.
More job opportunities
The result of business expansion and growth is more job openings, mostly for the middle class, who will be the recipients of these jobs and eventually patrons to realtors. This will lead to the increased demand for low and middle-income property.
Increased real estate activity
Plans are also underway to develop more commercial and residential properties within the middle-income bracket areas. Old Mutual Investment Group Property Investment (OMIGPI), an African investment group interested in Nigeria, recently signed an MOU with a Nigerian company, Cerberus Ltd, for a joint venture to create and manage a waterfront in Abuja.
They also plan to develop and manage a precinct of commercial properties on a 29.3-hectare site at Jabi Lake in Abuja. In the same vein the administration of the FCT has concluded plans with Churgate group of companies to construct one of the biggest shopping malls in Africa in the city. The 50-storey shopping mall project will be the tallest in Africa and will be situated at Constitution Avenue beside the proposed Abuja transportation centre.
Favorable business environment
The World Bank, in a recent survey, named Abuja the easiest city to do business in Nigeria. The survey, which considered 11 states, including Lagos, placed Abuja top for its ease in registering, starting and running a business. David Bridgman, World Bank manager on foreign investment advisory, said it takes about 28 days to register and start a business in Abuja, which also provides the cheapest cost for starting a business among the 11 states surveyed.
After-effect of the demolition exercise
After the demolition exercise the cost of housing in many parts of the city went up because demand rose from those who had been displaced. Landlords also insisted on two years rent in advance.
Trend
The construction of middle-income and commercial properties is rising. Owners occupy most high-end properties and those in the market are beyond the reach of the rising population of middle-income property seekers. Businesses, job seekers (especially fresh graduates) and other migrants who see Lagos as congested find Abuja a comfortable alternative thereby increasing the population and putting pressure on real estate demand. Foreigners flocking into the city for investment opportunities, tourism and other activities would also impact positively on real estate in Abuja, going forward.
Strategy
You can buy into this market by:
•Speculating with land in any of the areas mentioned above. Some areas have already been earmarked for sky-high increases in the near future.
• Redevelopment: You can buy existing property and redevelop to enhance income.
• Construction: With proper research you can construct property that will sell well
• For middle-income property, invest more in rentals for high-income property; invest in property you can sell.
• Go for commercial property in the business districts, central area, and others.
Looking ahead
The Abuja property market will deliver strong returns in the coming years, when most of the proposed real estate projects will be ready. The best time to get in is now.
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