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BuyLetLive expands its team with the latest appointment of a new Chief Operations Officer, Modupe Agbolahan to its management team. Astute leader with business acumen in real estate and property marketing, Modupe brings onboard a wealth of experience in building sustainable stakeholder partnerships and brand loyalty.

Until recently, she was the Assistant General Manager at Realhouse Communications Limited where she delivered rapid market adoption of Castles Lifestyle Magazine and grew the portfolio to N100M Annual Recurring Revenue. She led the team to achieve excellent customer service to over 10,000 real estate practitioners earning the title “Nigeria's premier real estate magazine”.

Announcing the onboarding, Olorunsola Awolola, the Chief Strategy Officer, said, Modupe’s appointment will support the accelerated execution of BuyLetLive’s ambition and 3year growth trajectory to dominate the Market through Partnerships and excellent Customer experience. “As a real estate marketplace, BuyLetLive is a safe meeting point for stakeholders in the ecosystem. Our users are at the core of everything we do. It is why we harness resources from the best available to ensure we deliver on our promise”.

“I am very happy to be joining this family. I have seen the active commitment and passion of the teams to addressing user pain points in property search for rentals, finding short lets and outright purchases. The team relies on profound market insight, adopting user research for concrete strategy. All that we do is from a place of commitment to our customers. I am ecstatic to be a part of this and we will do ground breaking things!”

Modupe has a strong background in commercial strategy, consumer marketing, customer service, brand building and customer analytics, a great addition, especially with the massive growth the platform has seen over the last few months.

As the Chief Operating Officer, Modupe will oversee marketing and operations, while Olorunsola will now oversee technology and product developments. This promotes the goal of BuyLetLive as a proptech platform giving the best experience in property search made easy. 

At the press conference, Olorunsola announced the release of the BuyLetLive Mobile App and state other plans in the blueprint for improved property search. We started operations 8 months ago with only the web application. This was a deliberate approach to understand our users. More importantly, we needed to study their pain points and build what really is value to them. We are happy to announce that the app will improve agent upload sessions by 40%. Of course, for those who request a more personal touch, we have a dedicated customer service team and an active web chat to directly receive feedback, enquiries, and special requests from customers.

About BuyLetLive: BuyLetLive’s mission is to simplify, digitize and streamline the buying, selling and rental experience for the real estate ecosystem in a user-friendly interface, using top-quality photos to view. They give prospects peace of mind by verifying agents on the platform and offer VAS services that ensure that their customers find the process of searching and settling into their new homes, seamless.

If you are a young professional living in Lagos or planning to relocate to Africa’s megacity, one crucial financial responsibility to consider is accommodation. Our rental price index note highlighted that the average asking rent for apartments in Lagos has increased by 20%+ over the past year. This was based on an analysis of a pool of listed apartments, comprising 1 bedroom, 2 bedroom, 3 bedroom and 4 bedroom apartments in multiple locations in Lagos. While rental prices have increased across board, there are still a few locations where young people can find decent apartments with rental values below one million naira per annum.

In this article, we have profiled and ranked locations where annual rental values for 1 bedroom apartments are still under one million naira, and what makes them attractive for young renters. We adopted a number of metrics including infrastructure, average rental price, availability of power supply, proximity to the CBDs, and overall security/neighborhood serenity in ranking these locations.

Ikeja GRA

Ikeja emerged as the top location to rent a 1 bedroom apartment in Lagos. Based on our property inventory within Lagos’ capital area, the average asking rent for 1 bedroom apartments in Ikeja is N800,000 per annum. So far, Ikeja is one of the areas with decent road infrastructure in Lagos with a modest electricity supply compared to the other locations under consideration.

Gbagada

Ranking second on the list was Gbagada. The average asking rent for 1 bedroom apartment in Gbagada is N650,000 per annum. Outside the fact that the neighborhood has a very decent power supply, Gbagada also has quick access to the Island through the Third Mainland Bridge and the rest of the Mainland through Oworonshoki-Oshodi Expressway. The quality of power supply, affordability, centrality, and accessibility of the neighborhood all come together to make it a choice location to rent an apartment.



Magodo

The average asking rent for a 1 bedroom apartment in Magodo today, is N800,000 per annum. Among other things, Magodo is most notable for its serenity and the decency of the apartments within the estate. Magodo is one of the affluent neighborhoods on the Lagos Mainland, a well-organized estate which has since been modernized and now hosts some of Lagos’ most affluent and middle class.

Yaba

Yaba has over 8 tertiary institutions and a number of technology hubs within it attracting a large population of young people. Due to its proximity to Victoria Island and other business areas in Lagos where the bulk of young people in Lagos work, Yaba is dubbed a residential hub for the younger demographic. As of today, the average asking price for 1 bedroom apartments in Yaba is N700,000 per annum and based on our ranking, Yaba is the 4th best location to rent 1 bedroom apartments for less than 1 million naira in Lagos.

Surulere

Surulere is perceived as a middle-class neighborhood in Lagos supported by pockets of industrial and residential activities. Young people and the middle class in Lagos now like to live there because of its relatively centrality and close proximity to Lagos Island and Victoria Island.  Based on our database, the average rent for 1 bedroom apartment in Surulere is N650,000 per annum, and Surulere ranks 5th in our list of top locations to rent 1-bedroom apartments for less than 1 million naira in Lagos.

You can follow us on LinkedIn and Instagram to get more insights into what is happening in the Nigerian real estate market. Send us your comments and feedback to research@buyletlive.com and we will like to keep in touch.

It is interesting how virtual working and virtual shopping have fused into our daily living, fundamentally changing the world, especially the global real estate market dynamics. The initial impact was a downward turn in revenue from shopping malls, office space rentals, and purchases. Although macroeconomic statistics show that adversely impacted sectors are beginning to rebound, one critical fact is that the way our world works may not return to what it was pre-COVID-19.

Will the real estate market in Nigeria make a full recovery? Can companies operate without a physical office or return to the status quo? How can the real estate market in Nigeria make a full recovery to pre-COVID19 revenue levels and grow above it? Perhaps repurposing some of the purpose-built real estate assets to the property types in current demand can give respite? Let’s dive in!

Since the 2016 Recession, retail and office sectors in Nigeria have recorded a decline in performance. In Nigeria, COVID-19 only accelerated the impending decline as factors like xenophobic attacks on malls, reduced office occupancy, remote work, and booming e-commerce were already reducing the demand for office spaces, shopping malls, and retail chain stores. Before the pandemic, the asking rent in Lagos for prime office projects in Ikoyi and Victoria Island (VI) was already down to $700 and $600 respectively from about $1,000 and $800 per square meter while prime shopping centers in Lagos like Ikeja City Mall (ICM) had a weighted average rent of more than $42/m²/month. In contrast with today, these rents have dropped by over 15% between 2016 and 2021. Further deepening this, a number of major anchor retailers including Shoprite, Mr. Price, Woolworths, and Truworths International have recently made an exit from the Nigerian market further declining the real estate demand in their supply chain.

 How is this impacting the bottom line of asset owners?

Reports show that Investors have lost over 40% of rental revenue since 2016. Since 2018, the rent and occupancy levels for Grade A office spaces in Lagos have fallen by more than 20% according to data from Knight Frank Africa and Estate Intel. According to a report by W Hospitality Group, the Lagos and Abuja hotel markets since 2016 and through the pandemic have seen a double-digit decline in occupancy rates. According to hotel experts, room occupancy in April 2019 was 63.7% but had dropped by over 30% in April 2020, leaving the market struggling to date. Abuja experienced a 51% drop in occupancy over the same period. There is a widening gap to fill following the exit of these major anchor retailers.

According to Broll Property Services, the ideal average rent in core markets including Lagos was between US$50 to US$80/m² per month in 2016 but is now at a 16% decline over a 6-year period. Even worse, outside Lagos, rentals in less prime locations, previously reported to be within $35-$50/sqm/month before 2016 currently average at $20/sqm/month. It represents a steep 43% decline. Following the facts, we estimate that investors have lost over 40% of revenue on office, hotel, and retail assets since 2016.

 How can investors make a recovery? Repurpose, relaunch and sweat their existing assets.

With the world’s revolution post-COVID, investors are constantly exploring ways to adapt assets for alternative uses. Real estate investors across the world are doing this too to make the best of the situation. In a highly sought-after city like Lagos, possibilities exist for investors to benefit from this approach. At the beginning of the year, Growthpoint, South Africa’s largest office developer partnered with Setso and BlackBrick to convert its Riverwoods, Bedfordview office project into a residential villa. This was a clever response to oversupply in the market and the growing demand in the city’s residential sector after the pandemic.

 What strategies should you consider when repurposing?

Target sub-sectors with a strong long-term demand pool

At the end of 2021, it was estimated that Nigeria had a housing deficit of over 20 million units. Lagos alone, reputed to be the commercial nerve center of the country, had a deficit of about 3.2 million units. To date, housing Nigeria’s growing population remains a national challenge.

Estate Intel reports that Lagos has approximately 13,490 hospital beds in the healthcare sector, serving a population of over 21 million. This means that there is less than 1 hospital bed to serve a thousand people. It is 88% short of WHO’s recommended 5 beds per 1,000 population.

In a 2021 report by Knight Frank, the real estate consulting firm alluded that changing occupier requirements and fast-moving consumer goods underpin strong demand for real estate tailored to logistics. According to Knight Frank, warehouse demand in Lagos currently stands at over 1,000,000 square meters, with only about 300,000 square meters available for supply.

All these data reflect a strong undersupply of real estate in the residential, healthcare, and logistics sectors of Nigeria’s economy. It clearly shows what investors thinking about repurposing their assets should consider.

There is also a need for investors to position their assets to help address broader economic and social issues.

 ESG, Sustainability Considerations, and the need to treat each asset uniquely.

The rising prominence of Environmental, Social, and Corporate Governance (ESG) in our world today is also shifting real estate needs. Responsible and socially conscious investing is another way to term it. Rising global concerns over climate change are prompting actions from all players in the industry. Investors are beginning to demand more sustainable buildings and it is not only because of pressures from governments and authorities. Sustainable buildings tend to save on maintenance and operational costs in the long term.

 However, not ‘one-size-fits-all’, location, demand, and local infrastructure will inform what is viable. In the context of Lagos State, possible use cases are likely to range from residential (especially for younger people) to healthcare and pharmaceuticals. Co-working/flex spaces and provision for logistics will occur with demonstrated demand. Although it might be a difficult time for investors, we believe this presents an opportunity to meet a new and evolving market demand.

 Your thoughts?

Let us know how else non-performing real estate assets can be better positioned for profitability. You can check out BuyLetLive.com to find affordable homes that meet your taste and budget. We would love to keep in touch! Follow us on LinkedIn and Instagram for more insights on how to navigate the Nigerian real estate market.

In basic accounting, rents are classified as an operational expense. However, these days, one begins to wonder whether rent is actually an operating expense as the amounts are now tending towards the cost of some capital projects. While this might sound like an exaggeration, paying rental fees is fast becoming one of the expense lines that take the biggest chunks of Lagos residents’ annual income.

Research we conducted a month ago revealed that in Lagos, residents now spend as much as 70% of their annual income on rent. Our recent analysis of residential rent pricing across the city also found that the average asking rents for properties have increased by over 20% in the last 12 months. As input costs continue to be on the rise, property development budgets are at their all-time highest, as the mismatch between general demand & supply continues to widen; rental prices are driven further up.

For starters, what does this mean for the average Nigerian looking to rent an apartment? How does this increase impact the purchasing power and saving culture? What does it mean for property developers and investors? These questions and more are what we discuss in this article. Before we dive deeper, here are some key takeaways.

●        Average rental price in Lagos has increased by over 20%.

●        Rental prices for properties on the “Island” in Lagos are now 37.5% higher than in the rest of the city.

●        Asking rents in Lagos frequently represents closing prices.

●        Rising construction costs may not fully justify the extent of rental price surge as even the asking price for older properties match closely to newer ones.

●        Lagos residents in general, now have more rent burden to bear in addition to hikes in the prices of other commodities.

●        Average personal savings have likely deflated by at least 25% since last year.

The average rental price has increased by over 20% and there is barely enough room for the renters to negotiate.

After a detailed analysis of our citywide property listings database, we found that the average rental price in Lagos grew over 20% in the last 12 months. This data point is striking for us, and probably you too. While it is good news for developers and Landlords, it means that the average Lagos resident whose income may not have seen a similar increase in the period now has more rental burden to bear in addition to the surge in the price of other commodities.

In most markets, asking prices are usually subject to negotiations between the Landlord and the proposed tenant. Typically, negotiation windows range from 1% to as high as 20%. Conversely, the Lagos rental market does not allow much room for negotiation. An intense demand pressure throws a high volume of requests to Landlords who then rent to the highest bidder. This logic is how asking prices in Lagos end up becoming the actual price that tenants pay.

With rental fees being demanded one year in advance, the expense is even more burdensome. Our research showed that about half of Lagos’ population will need to spend up to 70% of their annual income on rent if they were to get decent apartments in locations close to the Commercial and Business Hubs. Going by the data from the Nigerian Bureau of Statistics, the headline inflation rate as of May 2022 stood at 17.71% on the backdrop of rising energy prices and Food inflation at 19.5%. The overall implication is that the average person in Lagos now has more financial burdens to bear.

Source: BuyLetLive

One of the most obvious reasons for increasing rent is the rising cost of construction. Like in every production market, an increase in input cost mostly results in a corresponding increase in the selling price. Ideally, rental fees of new developments may increase at the rate of the inflation of construction materials, but a lower fee increase is expected for older structures. Yet, when we analyzed our pool of property listings, we discovered that even older projects, barely carrying renovation expenses, are also pricing significantly high.

This increase in rent means that potential renters also have to pay the higher agency and legal fees, which are tied to the rental fees. A number of prospective renters we spoke with pointed out that these fees are major discouraging factors. After we dug deeper, we found that the asking rent in some locations has grown more than in other locations across Lagos.

Rent prices in Lekki 1, Victoria Island, and Ikoyi have grown at 37.5% above the average growth rate in Mainland locations. This is not surprising because property owners now spend more to build houses, and therefore charge higher to compensate for the high cost of land and other location-specific cost factors. Most properties on our database for Lekki 1, Victoria Island, and Ikoyi are either recently built or renovated. Due to this, property owners in these regions have reason to charge higher than similar projects in other parts of the city. The cost of land in these locations is also higher, warranting developers to charge more, to cover associated costs.

Among all property types analyzed, 3-bedroom apartments had the highest price change.

Based on tracked data, we noticed that the asking price for 2-bedroom apartments across Lagos has grown higher than other apartment types. Asking rents for a single bedroom, 3 bedroom and 4 bedroom increased at 26%, 24%, and 22% respectively. On the other hand, the asking price for 2 bedrooms increased by a whopping 27% in 2021. An emerging and more prominent reason is that young professionals working remotely need extra room to accommodate a home office. It accounts for the reduction in the supply of 2-bedroom apartments compared to other property typologies. This creeping scarcity adds to the increase in cost.

Source: BuyLetLive

In a nutshell, there is more financial pressure on the average Nigerian. The cost of transportation, food, and other basic living necessities have increased over the year. While many are struggling to keep up with this, the rise in rental rates would mean that residents either find alternative sources of income or figure out creative ways to manage these costs.

You can follow us on LinkedIn and Instagram to get more insights on the latest in the Nigerian real estate market. We would love to keep in touch. Send your comments and feedback to research@buyletlive.com.