Lekki flood: Rental prices rise by 71% in Lagos Mainland

2017-07-20
NEW Telegraph Newspaper- Dayo Ayeyemi


As property owners and tenants in Lekki-Ajah axis of Lagos are licking their wounds following the devastating floods that ravaged the area last week, rental prices in the Mainland have continued an upward movement due to anticipated demand.

In some locations such as Surulere, Yaba, Obanikoro, Anthony and Maryland, New Telegraph gathered that landlords have increased their rental prices by at least 71 per cent.

Market survey has shown that a three bedroom flat in Adeniran Ogunsanya, Surulere-Lagos has gone up to N1.2 million from N700,000.

Estate agents said that property owners may further increase house rents above 71 per cent on mainland.

According to Principal Partner, Stephen Jagun and Co., Mr Stephen Jagun, an estate surveyor and valuer, rental prices for two bedroom flat in Ogudu have also risen to between N1.2 million and N1.5 million from N800,000.

The same scenario, he said, played out in some locations in Maryland, Yaba and Palm groove estates.

Managing Director, Financial Derivative Company, Mr Bismark Rewane, confirmed that rental prices on Lagos Mainland have increased due to location switching, adding that a four-bedroom flat in Adeniran Ogunsanya has gone up to N1.2 million.

Although Lekki rental prices had initially gone up due to increased demand for housing with the Lekki-Ikoyi link bridge as a major catalyst, experts said that recent flooding of the neighbourhood will reduce demand and invariably crash the rental values.

It was gathered that before the flood, rental prices have declined in both Ikoyi and V.I while prices have gone up significantly in lekki.

Jagun, an erstwhile Chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos branch, stated that rental values on the mainland properties would continue to go up due to huge demand.

Most tenants in Lekki axis, whose houses were flooded last week, he said, would definitely move away from the location to a nearby and safe location on the mainland.

“Most tenements are on mainland and the few houses available are in short supply, so rent will shoot up,” he said.

Besides, the expert predicted that property values in Lekki and Ajah axis will definitely go down, adding that real estate developers would also slow down their construction activities.

However, another estate surveyor, a Principal Partner, Akin Olawore and Associates, Mr. Akinola Olawore, said that flooding might cause initial panic and property management disruptions, but would not have major impact on demand.

He noted that high rental growth in mainland was as a result of real estate economic phenomenon, pointing out that when there is downturn, demand will shift from higher end to lower end.
Olawore said that a critical study of the phenomenon would reveal progressively higher growth down the neighbourhood value spectrum.

He said: “The flooding, of course, may cause initial panic and property management disruptions, but will not have major impact on demand. Those who chose to be on the Island have different reasons for choosing the location and, by the way, some parts of the mainland do get flooded too.”

Former President, Nigerian Institute of Building (NIOB), Mr. Chucks Omeife, said that movement to the mainland would continue as long as there are rental spaces until a time when the location becomes saturated.

Recent experienced flooding of Victoria Island and the Lekki axis, Omeife said, would definitely affect rental cost and property cost, pointing out that many occupants and owners would start thinking of playing safe and securing their investment to a more stable environment.

According to him, rental values in Lagos mainland has been on the increase for some time, attributing the trend to movement of corporate organisations and their administrative offices to the mainland to evade the rising rental cost associated with the Island.

He said: “It can be observed that in the past, most organisations want to belong to the highbrow area office location in the Victoria Island axis, but with rental cost almost hitting the roof and the declining economic situation, the chronic traffic logjam, the mainland, especially Yaba and Surulere, has continued to attract corporate organisations as the rental values in these areas are far less, compared to the island.

 

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