Security, Power and Internet emerges top 3 most preferred residential amenities by young professionals in Lagos

Security, Power and Internet emerges top 3 most preferred residential amenities by young professionals in Lagos

Security, Power and Internet emerges top 3 most preferred residential amenities by young professionals in Lagos

13th April, 2022

4 minutes, 21 seconds read

The demand dynamics for residential real estate in Lagos has changed phenomenally over the past few years. In the early 2000’s, landlords demanded rent in advance of 2 years or more. With increased exposure into the global market, the topic around “what the ideal housing system in Nigeria should be'' is gaining traction. What we are seeing today, is a growing interest around the monthly rental system with a slow but steady adoption especially as private businesses are finding creative ways through financing services to achieve this.  With consistently rising inflation rates, the average Nigerian’s disposable income is heavily impacted and their cash flow is becoming incapable of sustaining these bulk payments. 

Outside the challenge of effective annual rent demand, another topic of concern which has gotten very little attention is the changing dynamics regarding how “the demand for houses in Lagos is changing by demographics and how developers should be responding. Data from the Lagos State Government estimates that more than 40% of Lagos population fall within the ages of 15 years to 45 years with forecasts that this number will grow to more than 50% over the decade[L1] . Our interaction with agents in Lagos shows a growing demand from this demographic (students, young professionals and mid-level executives) with a preference for smaller sized apartments. This opportunity in the market initially has not been captured but we are beginning to see property developments responding to capture this potential.

We conducted a survey in Q1 2022 sampling young people between the age of 20 to 45 years to understand their location and amenity preferences when renting an apartment in Lagos. Based on our findings, Lagos’ young population want to experience the hub of social activities, but the currently high rental rates at these locations have been a major barrier. The recurring question then is ‘how can developers with projects in the core business districts optimise for this market profitably?’ In this article, we will be discussing some of the survey findings with interesting insights for developers who may want to tap into this segment of the market.

Yaba, Ikoyi and Gbagada emerged as top 3 preferred residential locations by young professionals

45% of the survey respondents selected Yaba, Ikoyi and Gbagada as their preferred residential locations. We dug deeper to understand the rationale behind these choices and found that proximity to the workplace and other business districts alongside availability of amenities were top considerations.  Although the commercial footprint in Ikoyi is growing rapidly, the region remains one of the most serene residential neighbourhoods in Lagos. Ikoyi also provides easy access to Lagos Island, Victoria Island and Lekki Phase 1. Yaba and Gbagada, with their proximity to the 3rd Mainland and Eko-bridge, also provide easy access to the commercial and social hubs, with a number of amenities including restaurants, banks and recreational facilities.  While this presents an interesting insight on where Lagos’ young population would like to live, there is a mismatch with paying potential. 83% of the respondents earn less than N6m in gross revenue annually. Even though they would like to live in Ikoyi, their seemingly low-income level makes it difficult to live in this neighbourhood where 1 bedroom apartments rent around N6m or more per annum.

Well-built 1 bed and 2 beds apartments with good facility management has more allure for young people

From our survey, 65% of the respondents prefer renting 1 bed studio and 2 bed apartments. However, 80% of Lagos' existing property stock consists of more than 3 bedroom typologies. Historically, developers in Lagos have been more focused on larger sized apartments from 3 bedrooms and more. Based on our interaction with agents, demand is tilting more to smaller sized apartments and response to meet this demand is through remodelling of existing large sized apartments into smaller ones. Landlords are increasingly converting their old 4 bedrooms into units of 2 beds and 1 beds, and we have also seen that the adoption of co-living options among young people is also increasing. Although developers have identified this shift in demand, supply is still largely limited. Another interesting finding from our survey is that quality facility management is becoming a key consideration, and the young working population can trade large size apartments for smaller sized alternatives that are well managed and closer to their workplace.

Amidst nationwide power shortages, availability of 24-hours power and security remains the most important amenity for Lagos young working population

With the heightened security challenge across the country, and the recent hikes in power tariff, it is not surprising that 24 hours security and power are the two most important amenities among young people who are renting apartments in Lagos. Almost 75% of the people we surveyed preferred to have 24 hours power and security in their apartment as against other amenities including gym/sport facility, laundromat, internet connection and supermarket. Unfortunately, the cost of electricity has increased phenomenally over the past few months, making it almost impossible for most residential estates to meet their agreed service level. The price of diesel in Lagos for instance, grew by over 150% from ₦303 in January to over ₦800 per litre by the end of March. In response, the average power tariff in serviced estates grew to almost double from ₦83/KwH (kilowatt hours) to over  ₦140KwH.

Meeting the residential demands of Lagos' young population is a tough nut to crack, but also an opportunity for innovative developers.

Considering the high cost of land and other construction input, it is almost impossible to build a decent project in prime neighbourhoods in Lagos. The outcome of our survey presents the most important things in the checklist of Lagos’ young renters. For innovative developers, there is still value that can be created within this market. However, this will require a lot of creativity to find a balance between cost and paying potential of this market segment. 

We love to hear from you, please send us your comments and feedback to [email protected] and we wouldl like to keep in touch. You can follow us on LinkedIn and Instagram to get more insights into what is happening in the Nigerian real estate market.

Share:

Related Posts

9th May, 2022

1 minute, 30 seconds read

Lagos Building Collapse - Another tragedy at Ago Palace Way Despite Structural Integrity Measures

Barely a week after a three-story build collapse that killed over ten people in the Ebute Meta area of Lagos state, another building collapsed in the Ago Palace way area of the state sadly leaving behind nothing for the occupants.

The unfortunate incident happened on the 7th of May, 2022 at Chris Agadi Street off Ago Palace way opposite AP Fueling Station.

 

Despite the Lagos State Structural Integrity Test, this menace continues to rock Lagos State and this is worrisome.

 

At the time of this report, the head of the Lagos State Emergency Management Agency(LASEMA), Olufemi Oke-Osanyintolu confirmed in a statement that no casualty was recorded.

He said; “On arrival, information gathered from the residents revealed that the building gave signs several hours before the building collapsed. Fortunately, nobody was trapped as all the occupants evacuated the area when the signs began 2 hours before the collapse. A headcount of occupants was carried out to ensure no occupants were missing and the remains of the building were cordoned off. The operation was concluded at about 5:23 a.m.” The statement read.

 

Taking learnings from this incident, we believe some questions need to be answered especially in educating the public in managing similar situations. 

What should be done when a building gives signs of collapsing?

Who should be notified and what safety measures should be taken to avoid casualties?

 

The agency added that the site will be handed over to the Lagos State Building Control Agency (LASBCA) and the Ministry of Physical Planning for further investigation.


While the government and its agencies are making moves on this issue, the big question still looms, “Which building is next to collapse?” “Is this becoming a new normal that we should get used to?”


In addition to the intervention from the Aside the government, real estate practitioners must take lessons rapidly on ensuring and maintaining the structural integrity of buildings. Should there be a nationwide structural integrity certification drive? Do practitioners need to involve an extra layer of testing structural integrity? We must begin to answer these lingering questions.

28th April, 2022

3 minutes, 26 seconds read

Five Steps that can help forestall the trend of collapsing of buildings in Nigeria

Since the 12th of September 2014 when a six-story building located in Ikotun Lagos collapsed and 115 people were demised, there has been a record of many more collapses across Nigeria. According to reports, the approved plan for the Ikotun property was a two-story building, but the owners decided to expand it and make the building four stories higher.

In December of 2021, we also witnessed the Ikoyi building collapse which killed 42 people. These occurrences have brought up a lot of questions as to the causative factors. There have been different reports on the reasons for these collapses, some confirmed and others not. However this is viewed, this trend is taking lives, burning money and resources, and quite frankly needs to be curbed.

In this article, we will be sharing Five Steps than can help forestall the collapse of buildings in Nigeria adding to the knowledge out there already.

1.    The Right Human Resources

Experts have blamed incompetent artisans and the feeble oversight of builders as one of the significant reasons for collapsed buildings in Nigeria. Some contractors reduce the expenses of the project and sometimes hire the skills of non–experts who are not authorized to take part in any building projects.

One of the guarantees of quality assurance in the process of building constructions is ensuring the appropriate skill and manpower to deliver through industry best practices and well-tested policies and procedures. Contractors are encouraged to spare no expense in sourcing best-in-class skills and competencies for construction projects.

 

2.    Subscribe to the appropriate Structural Design Process

As we all agree, project planning is one of the most important steps in project management. For construction, the design phase is the part of planning that determines all other aspects of the project. In designing a building, more Important than the aesthetics and fancy spot are the integrity of structural design and the corresponding Bill of material (BoM) and Bill of Quantity (BoQ).

In building construction, project leadership should subscribe to building design standards that help to verify and certify the integrity of the plans. Structural/project workers also ought to guarantee that their plans are investigated and supported by suitable specialists before the building kicks off. This is essential to make sure that every building plan is made with unique design considerations like weather conditions, topography e.t.c.

 

3.    Stick to Quality Building Materials

Specialists have uncovered that one of the significant reasons why some buildings collapse is the failure of adherence to quality building materials, the Standards Organization of Nigeria (SON) also substantiates this. The research pointed at how concrete is mixed and used, most concrete used in the building does have all properties and particles properly bound together.

According to structural experts, there are three concrete types now being used around the world, which are; 32.5mpa, 42.5mpa, and 52.5mpa. The 32.5mpa can only be used for plastering and block making, the 42.5mpa is for multipurpose usage such as block molding, concreting, slabs, and high-rise buildings but it can’t be used for plastering, the 52.5mpa can be used for high density works such as bridges, embankments, dams and retainer walls.

 

4.    Imbibe Sustainable Maintenance Culture

Bad maintenance culture can impact the structural integrity of a building and cause structures to collapse. The best-developed structures need consistent attention and if the attention is postponed, what can begin as being something exceptionally minor is at risk of transforming rapidly into a costly man-made disaster. No structure can exist all through its life expectancy without proper maintenance. Even if a building is structurally impacted, the right remedial actions by expert structural engineers can help to restore the building. Experts recommend that building maintenance begins on the day the builders leave the site. Hence, the need for the maintenance of structures is very important.

 

5.    Obtaining and adhering to the National Building Code of Nigeria

The National Building Code of Nigeria is the body that is relied upon to manage and regulate all operations in the construction industry in the country. Experts have said that the failure of builders to obtain a pass from the National Building Code has been to a great extent the reason why the country has experienced several collapsed buildings over time. They believe that the National Building Code if enforced and strictly followed, will; control and stop non-experts and quacks from participating in any building projects in the country, guarantee consistent compliance by builders to stop the use of substandard materials for any building project and guarantee that builders and property owners maintain a good maintenance culture consistently.

In conclusion, the trend of collapsing buildings can be reversed in Nigeria if we follow the requirements of building construction.