Lagos luxury property: “No matter how bad the economy is, buy it”

Just across the water from Lagos mainland, Where most of the megacity’s 20 million people live in shacks, luxury real estate developers Banana Island sell millionaire luxury apartments, made in gold, black and cream.

“What we sell is quality,” said Sijibomi Ogundele, the 42-year-old executive director of real estate developer and construction company Sujimoto, waving her hand around an apartment in Giuliano di Medici’s apartment building. Indicates the bathtub conceived by Zaha Hadid in the master bath: “This conception is one of the most expensive in the world.”

Ogundele is part of a luxury property boom in Africa’s largest city that has gone even further as the broader Nigerian economy has suffered rising inflation, slow growth and high unemployment.

The driving force is the ultra-rich Nigerians looking for a place to park their money in an economy where the central bank has devalued the naira by more than a third against the dollar in the last year.

“We have a niche market – one percent one percent,” Ogundele said. “There aren’t many, the number isn’t growing.” . .[but] These people, no matter how bad the economy is, will buy it. “

The view from Giuliano’s balcony – past an empty lot full of building materials and a couple of lazy, big-horned bulls – is more of apartment blocks that were built by Sujimoto.

The Lucrezia, a 14-story luxury building under construction where the apartments will depart for $ 1.9 million, features a private Imax cinema. Nearby is the Leonardo, a 25-story complex that advertises 22 swimming pools and a “virtual indoor golf bar.”

“During Covid, people. . . they weren’t spending money because they didn’t travel, or shopping, or anything, so I think they felt rich, ”Andrea Geday, chief executive of El-Alan, co-developer of the development of 25 floors 4 Bourdillon, uu tallest residential building in West Africa. “And the devaluation of the naira was a factor, because they needed to solidify the funds somewhere, and the only way is to buy property.”

From Geday’s 21st floor in 4 Bourdillon, the construction boom in Ikoyi, arguably Nigeria’s richest and most exclusive district, is clear.

Not only are there half a dozen towers collapsing, including one right next door, but dozens of smaller projects – multi-storey four-story buildings or developments of a dozen townhouses cut into biscuits.

Luxury towers serve the ultra-rich people of Nigeria, whom Knight Frank estimates at around 200,000 or 300,000, for whom money is not an object, and who hold second homes in London, Dubai, New York or Miami.

Some analysts are wondering who will live in all these new properties, especially considering the numerous existing apartment complexes in the Lekki and Ikoyi districts that are at only 30 or 40 percent capacity.

The answer is that it may not really matter, given how much real estate is useful as a laundry service for bad money, said Timothy Nubi, a professor of real estate management at the University of Lagos,

“There’s a school of thought that’s a way to store capital from people who don’t have the opportunity to take their money abroad, or put their money in banks – they just put their money in it. property … and I hope they can sell it years later, ”Nubi said.

“It’s just crazy. Look around Ikoyi and you will see the whole left side of a road [with buildings] which are vacant. “

This week, Abdulrasheed Bawa, head of the Nigerian Economic and Financial Crimes Commission, told Channels TV that “90 to 100 per cent” of the money laundering was done through real estate.

At the sales office for Lucrezia, Ogundele said he had heard about the money laundering that was part of the real estate game in Nigeria, but had never experienced it himself. “And there’s no money to steal now anyway!” he said, joking about the poor state of the economy.

Given the huge disparity in wealth and opportunity in Lagos and Nigeria in general, Nubi said the government should focus on investing in affordable housing in a city with a housing deficit of about 2.5 million units. and in which two-thirds of residents live in barracks. , according to UN estimates. “We have this problem of disagreement in the real estate market in Nigeria,” he said. “What comes to market isn’t really what people need.”

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