Lagos real estate projects under construction increased by 19% in 2021 – Estate Intel
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Loading... - Henrietta Adams
- 17 Jan 2022
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The real estate sector saw a 19% increase in the total number of projects under construction in 2021 relative to the year before.
This is according to the 2022 Lagos Pipeline Report by Estate Intel which described a summary of pipeline projects measured in terms of ongoing construction projects in multiple real estate sectors within Lagos.
The report which broke down sector analysis into office, residential, hospital, retail, healthcare and notable mentions marked an important shift and a return to relative bullish development activity, especially in new sectors of interest despite volatility in 2021.
For the residential sector, the report measures stock as the total number of housing units, while the measure for office, retail and industrial is in square meters. Hospitality and healthcare sectors are measured by the number of hotel keys and hospital beds respectively.
Highlight of the report
The data points to an undersupply in the healthcare and parts of the residential sector, with others; including office and retail, facing oversupply.
The office sector has a total pipeline that is over 25% of existing stock, presenting a worrying outlook for vacancies in the years to come as larger leasing activity is still driven by relocations while the small pipeline in the healthcare and residential sectors, which are both under 2.5% of total stock point to an exciting opportunity for investors.
The pipeline in the retail space is among the largest, however, most projects appear to be on hold indefinitely for a number of reasons including a depreciating currency and poor access to foreign exchange, as such those projects have been removed.
Office Pipeline
In the office sector, the combination of vacancies ranging between 12%-36% in Grade A and B properties, coupled with a 24-month development pipeline that is over 25% of stock necessitating a negative sector outlook.
Despite a large total pipeline of 324,000m2, only 63% is currently under construction. Others remain on hold, conceptual or in implementation phases. The largest deliveries expected during 2022 include Famfa Oil Tower and the Azuri Office Tower who announced technical completion during December 2021.
Residential Pipeline
The residential market in Lagos has been in a state of constant undersupply as the population and demand continue to grow at a faster pace than housing delivery. According to the data, up to 18, 918 units are in the pipeline, which will lead to the growth of the current stock by 1.2% upon completion.
Notably, well-built projects, especially with developers with a track record, continue to perform well, spelling a positive market outlook, especially in non-luxury segments. Read More…
