| Will Lagos Island Regain It's Lost Glory? |
 Until the exodus to Victoria Island, Ikoyi, and now Lekki and its environs, Lagos Island business district was the major hub of commercial activity in Lagos and Nigeria. It, however, lost this estate to bad roads, insecurity, congestion and failing facilities. As a result the business elite moved, leaving behind the government establishments and those who due to very significant investment in the area could not afford to move. Until the exodus to Victoria Island, Ikoyi, and now Lekki and its environs, Lagos Island business district was the major hub of commercial activity in Lagos and Nigeria. It, however, lost this estate to bad roads, insecurity, congestion and failing facilities. As a result the business elite moved, leaving behind the government establishments and those who due to very significant investment in the area could not afford to move. But with the upgrade by the state government of the road networks there and other developments things appear to be looking up. Will its glory be regained? Turning a new leaf Recent developments on the island include the reconstruction of major link roads (enhancing good road network), installation of traffic lights, and increased number of traffic wardens and police officers to ensure order and better traffic control. There are also more drainage facilities to reduce flooding and enhance the quality of public utilities in the area. The presence of hoodlums and the popular agbero boys has reduced and people now conduct their businesses with fewer distractions. State of affairs Lagos Island is host to major financial institutions in Nigeria, head offices of major banks such as UBA, First Bank, Wema Bank, Union Bank are there. It also hosts public agencies like the Central Bank of Nigeria, the Nigerian Stock Exchange, the Nigerian Ports Authority, Nigerian Telecommunications Plc., the regional post office, and a number of stockbroking and legal firms, eateries, and oil companies. Major roads on Lagos Island are the popular Marina and Broad Street. Others are Simpson Street, Nnamdi Azikiwe Road, Tinubu Square, Kakawa, Old Marina, Customs, Bamgbose, Alli Balogun, and Breadfruit Streets while the most visible areas remain Marina and Broad Street, where the most prominent businesses are located. There are a number of old properties on the island and a few new ones. Some of the old properties need major repairs, maintenance and replacement of their facilities, while for others a major disaster seems inevitable the frequent collapse of buildings on Lagos Island is a reflection of the poor state of some buildings in the area. (In the last six months, four buildings have collapsed on the island.) Understandably, there has been a decline in business activity following the frequent collapse of buildings in the area. Businesses around the collapsed Bank of Industry building are on the wane, as the authorities have yet to take action on the building and restore confidence. Uche Ikechukwu from Osita Okoli Estate Surveyors and Valuers says real estate business has been low-key but believes that with the recent developments things will pick up. Along Marina, prices are between N5, 000 (base price) and N18, 000 per square metre while on Broad Street prices are between N5, 000 (base price) and N10, 000 per square metre. But office spaces at Ajele, which is off the major areas, have a ceiling of between N6, 000 and N7, 000 per sqm. However, this depends on the type of property in question. Some offices are located in A-class buildings and others in B or C class. A-class properties are new and equipped with modern facilities. In some of the buildings more maintenance is needed; the lifts and generators do not function properly and there is poor water supply. A three-storey off Marina could go for up to N120 million. Though it is hard to find residential properties along the major areas, moving further inside to Onikan, Igbosere, or Bamgbose, a 2-bedroom costs between N200, 000 and N250, 000 per annum; a 3-bedroom goes for between N300, 000 and N350, 000. At Onikan, a 2-bedroom could go for as much as N1.5 million per annum. The way to go What sometimes happen on Lagos Island is to buy a property demolish it and erect a new one, mostly high rise buildings. The frequent collapse of buildings shows that a number of the properties here are quite old and weak, so investors and developers buy the structures, bring them down and put up new better-serviced ones. For instance, at Apongbo, a branch of Access Bank has just been erected following a demolition. At strategic places along Broad Street there are new constructions going on. However, where the property suits the investor, he buys, does some repairs and leases it out. Looking ahead Business is picking up again and developers and investors are returning to take advantage of the opportunities. This, coupled with ongoing construction, road repairs, maintenance, and heightened consumer interest, may well help Lagos Island regain its past prominence, though not all realtors agree. Realtors' views Akinwale Oluwole of Biodun Odeleye & Co. Estate Surveyors and Valuers believes Lagos Island will continue to play second fiddle to Victoria Island and Lekki in terms of status and prestige, security and infrastructure, the key considerations for businesses investing in real estate. In his opinion there is already a gap that may never be filled. Chijoke Nwachukwu of Johnbull Amayeavbu Estate Surveyors and Valuers believes differently. According to him, it is only a matter of time before Lagos Island reclaims its prominent position. He sees the rate of development taking place there as one factor that will make the place attractive again and eventually rub shoulders with places like Ikoyi, Victoria Island, and Lekki. For Ikechukwu of Osita Okoli and Co. only a total redesign of the area, with the demolition of old and weak structures, and better security will bring both ends of the Island to the same level. Our view We believe Lagos Island is not likely to retake its crown and overtake Victoria Island as the leading commercial area, certainly not in the next five to 10 years. While a major upgrade of the road networks is still ongoing, and the security situation improved upon, our view is that more still needs to be done to remove the threat to lives, property, and businesses posed by urchins or area boys who still largely dictate how businesses are conducted in the area. And the constant violent clashes among them will continue to cost the island businesses. Another obstacle to real growth is the frequent collapse of buildings, which has largely remained unchecked. Developers and investors anxious to take quick profits have continued to erect buildings that are unapproved and structurally defective, and until the authorities check this, real estate will continue to suffer on Lagos Island. The Federal Government's presence through its agencies and ministries was also one key factor that gave the island its prominence then. It is hard to see how that could be regained with government long gone. No doubt, with the state government committed to reshaping the island and realtors putting returns on investment at between 40% and 60% real estate activities and other businesses will pick up, but not fast enough to rival places like Lekki and Victoria Island. The initiative on other key real estate investment considerations such as prestige, property type, easy access and pricing has been seized by places like Ikeja, Victoria Island, Ikoyi and Lekki. For instance, properties on Victoria Island, Ikeja, Ikoyi and Lekki command more respect than those on Lagos Island; developers and investors have more confidence in the state and ownership of properties in these areas than those on Lagos Island. You would find more modern structures on Victoria Island and investors looking for value go for those. Lagos is notorious for heavy traffic, but some places are better than others. Good road network and easier access to other parts of the state gives Ikeja an edge over Lagos Island. And because of these perceived advantages, places like Victoria Island, Ikoyi, Ikeja, and Lekki command better pricing than Lagos Island and invariably attract more investment. |
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