The battle for dominance in Lagos real estate is like one of these enduring arguments that seems to just go on and on endlessly without any resolution; Messi or Ronaldo? Lebron James or Michael Jordan? Apple or Samsung?
You see when Asake sang, “Lonely at the top”, he was grossly mistaken because it is not lonely at the top, it has never been lonely at the top. It is fierce!
Which can be best summarized by the popular Chinese proverb that goes, ”Two tigers cannot share one mountain,”.
On the mountain of Lagos real estate, there are only two tigers who sit at the tippity top, Ikoyi, the poster location for old money, with a history that goes back to Nigeria colonial days and where the residents are either titans of industries or scions of one versus Lekki Phase 1, the nouveau riche location filled with daring founders & CEOs of new technological companies, budding business magnates and kids who have no jobs yet make more money in a week than what most bank CEOs make in 6 months just from uploading videos of themselves on the internet.
Rich, but noisy and with a chip on their shoulders.
The only thing separating the two locations physically is the Ikoyi link bridge which if you are on, will take you just about 10 minutes to cross however despite this rather short distance, the gap separating the price of real estate in the two locations is a massive chasm running into hundreds of millions.
The average price of houses for sale in Ikoyi is ₦750 million, while the average for apartments is ₦500 million, compared to Lekki Phase 1 that is ₦449 million for houses and just ₦199 million for apartments. Who knew a distance of just 10 minutes could be this expensive?
While Ikoyi real estate is dominated by ultra-luxurious developers like Sujimoto, who is selling a 4 bedroom penthouse in his development, The Lucrezia, for $14 million, Lekki is filled with the rest who are in the luxury category, building masterpieces for the new money.
Ikoyi is one of the most expensive places to buy land with land going for ₦2 million/sqm on average. This high cost of land has made Ikoyi a neighborhood of high rise apartment units with 2 bedrooms usually going for as high as $1.5 million. My favorite Ikoyi high-rise remains the 4th Bourdillion. A 25 floor, 41 apartment Twin Tower located on the corner of Bourdillon and Thompson Road.
Ikoyi is known for its exclusivity, with the high cost of properties serving as a very effective filtration system that sieves out everyone apart from the richest of the rich. This exclusivity and high price has made it a brag and a high status symbol to have a property here.
The easiest way to say you got lots of money without even mentioning money is to say that you got a property or two in Ikoyi. Such is the class and prestige, to the point that Lekki’s best selling point is that it is close to Ikoyi.
Ikoyi is a mostly residential area, of course some international and local top companies have office spaces here but they are rather few and far in-between,
Ikoyi real estate market offers one of the best returns ever. Not only does it do that but it also does that at a faster pace than any other location in Lagos. You could acquire a property today and next week you are getting offers for that property.
Heard a story of an investor who acquired land at ₦1.2 million/Sqm and about 2 months later liquidated for ₦1.8 million/Sqm. Such is the demand for properties here.
Investing in Ikoyi real estate is extremely lucrative, the only set back is that entry capital into Ikoyi real estate is high, very high. Only the biggest players have their hats in the ring. Only the most affluent of real estate investors are active in this location.
Like the Nigerian street slang goes, “If your skin no full, no put body”.
As long as you have the money, by this I mean billions in Naira, then investing in Ikoyi real estate is actually a no brainer. There are just no two ways about it, you can’t go wrong in this location.
The two best investments I suggest for you is either doing high-rise off-plan or buying the few available lands. The money in real estate in Ikoyi is in the land, the land is gold. If you got the billions then definitely buy the land and hold. You will get a lot of offers but ignore those, just hold your land.
Buying land and holding is the best real estate investment strategy you can adopt in Ikoyi, hands down the best. Before making any payment, do your due diligence. Do your due diligence, don’t say I didn’t tell you.
The next best investment in Ikoyi is investing in high-rises, off plan. Companies like Sujimoto offer investors the opportunity to buy units off plan, this is very lucrative as ROI can be as high as 200% upon completion.
This however carries higher risk than just buying land, as there could be delays in the completion of the buildings amongst others.
When doing off-plan in Ikoyi, negotiate properly with the developers and your lawyers should be involved to draft out a sales contract that protects you and your investments, not just the developers. With clauses, like what happens when there is unnecessary delay on the part of the developers? What payment system works, is it on a monthly or milestone basis?
Milestone basis is the one I recommend you go with. You start with an initial deposit, maybe 30% and whenever they reach a previously agreed on milestone, you drop another sum, when next they reach another milestone you drop another sum till the project is delivered.
This way anytime work halts on site, you too will halt payment. All things being equal.
Now upon completion, whether you wish to resell your unit or rent it out will be up to you. I suggest either let it out or use it for short lets. The short Let market in Ikoyi is hotter than a supermodel and as lucrative as a goldmine.
Depending on the part of Ikoyi, some let as high as ₦500k per day. Do the math. Even the regular rent is not bad, at all. A 3 bedroom flat lets for ₦40 million/annum on average. Terrace duplexes let for as high as ₦50 million/annum. Fully detached are rare but where they do exist, they usually go for ₦90 million/annum upwards.
About 2 weeks ago I saw one that was letting for ₦180 million/annum.
Mind blowing, right?
Nah, this is Ikoyi. So this is even cheap.
While Ikoyi is a mainly residential area, Lekki has become the opposite. Lekki has become a commercial and business centre. Lekki has more offices than perhaps any other part of Lagos island.
Most of the houses in Lekki Phase 1 are owned by companies and businesses that have turned them into offices, malls, saloons, display houses and the rest. Every day, tens of thousands of workers come from all over Lagos to work in Lekki.
Every evening you will see them going home, the scene whenever I see it to me is similar to seeing students streaming out of their school to go home every day after school hours. Such is the number of workers who come to work daily in Lekki Phase 1.
Whereas Ikoyi is filled with corporate offices, Lekki is filled with commercial spaces and offices. Whereas Ikoyi is exclusive, with a prestigious and refined feel to it, Lekki is accessible to all and sundry.
So much so that during the day, when you are walking on the road 9 out of every 10 persons you meet don’t actually live in Lekki. They are just there on business, work or similar errands.
This is because Lekki has been commercialized too much, now it is more of a commercial area than residential. Despite this, Lekki still has one of the best residential estates on Lagos island.
Land in Lekki compared to Ikoyi is much cheaper so you can still get a really stunning fully detached duplex here for now. I say this because the price of land is appreciating so much that soon it will go the Ikoyi route.
With land so expensive that the only profitable development will be building high rise apartment units. At the moment land on average is going for ₦800,000/sqm. That’s just 40% of what Ikoyi is going for.
This means that Lekki has a lower barrier of entry than Ikoyi which is why there are much more developers and real estate investors active in Lekki real estate than Ikoyi. As it is a very good alternative to those who don’t yet have the financial capacity to play in Ikoyi.
If you don’t have the financial power to play and invest in Ikoyi real estate, invest in Lekki Phase 1, if you don’t have the financial capacity to invest in Lekki phase 1, then you can invest in Ikate, if you don’t have money for Ikate then you should consider Chevron and thus it goes. On and on till you get to Epe.
Just like Ikoyi, the best real estate investment I suggest for you is buying the few available land and holding them. This strategy in Lekki can give you even better returns than in Ikoyi. This is because Lekki is still cheaper than Ikoyi so you can buy more, also because it is still cheaper than Ikoyi, there is more room for appreciation of your land.
Right now Ikoyi is at ₦2 million/sqm, while Lekki is at ₦800,000 but trust me, Lekki is en route to the same ₦2 million/sqm. So buying land is the number 1 strategy I suggest for you in Lekki Phase 1.
Off-plan investment here is a good investment, you can make some very great returns but it is not as lucrative as in Ikoyi high rises. For the most lucrative off-plan investments, Ikoyi is number 1.
Another investment that I recommend for you in Lekki is short let apartments. Lekki short let market is booming like crazy, I am not aware of any location that is getting a higher occupancy rate than Lekki Phase 1 for short let apartments.
This is due to a myriad of factors, remember I told you Lekki has a lot of offices and commercial spaces, some of the workers are not full time. They work remotely and once in a while they come into the office, maybe a day or two in a week.
Due to the fact they aren’t full time staff, what they do is whenever they need to come in and report physically to their office they just stay in an apartment for the duration of their visit. This among other factors contribute to the booming Lekki short let market.
So apart from buying lands, another great investment strategy you can deploy in Lekki is getting apartments or houses and using them for short lets. This is highly lucrative. More lucrative than the usual, regular per annum rent.
However, to fully maximise the returns you will be getting when using your house here for short lets, I suggest you read this my previous article on all you need to know about making money from short lets.
If you want to invest in commercial properties, Lekki Phase 1 is the location for you. Lekki is hot for commercial properties, the demand is higher, much higher than supply so any commercial properties you have here is a big boom.
That’s it for the two locations. At the end of the day, there is really no competition between the two, both have their unique selling points, advantages, opportunities and market.
If you are looking for the most lucrative off-plan properties, Ikoyi is the market for you. If you are looking for premium plots, you can get it in both locations but Lekki Phase 1 has a lower barrier of entry and long term, a higher ROI. For the short let market, I rate Phase 1 over Ikoyi.
I am Ugochukwu…
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