Just across the water from Crowded mainland in LagosWhere the bulk of the megacity’s 20 million residents live in slums, real estate developers on upscale Banana Island are selling multimillion-dollar luxury apartments, made in gold, black and cream.
“What we sell is quality,” said 42-year-old Sijibomi Ogundele, CEO of real estate development and construction firm Sujimoto, as he waved his hand around an apartment in the Giuliano di Medici building. He points out the Zaha Hadid-designed bathtub in the master bathroom: “This design is among the most expensive in the world.”
Ogundele is part of a boom in luxury real estate in Africa’s largest city that has taken off even as the broader Nigerian economy has struggled with high inflation, slower growth and high unemployment.
The driving force is super-rich Nigerians looking for somewhere to deposit their money in an economy where the central bank has devalued the naira by more than a third against the dollar in the past year.
“We have a niche market — one percent of one percent,” Ogondel said. “There are not many of them, and their number is not increasing . . .[but] These people, no matter how bad the economy is, will buy.”
The view from Giuliano’s balcony – past an empty plot full of building materials and a pair of lazy oxen with large horns – is more apartment buildings constructed by Sugimoto.
The Lucrezia, a 14-story luxury waterfront building under construction with apartment prices starting at $1.9 million, includes a private IMAX cinema. Located near Leonardo, is a 25-storey complex that advertises 22 swimming pools and a “virtual indoor golf bar”.
“During Covid, people . . . weren’t spending money because they weren’t traveling, not shopping, nothing, so I think they felt rich,” Andrea Gidayi, CEO of El-Alan, a developer co-developer of the 25-story Bourdillon development, Tallest residential building in West Africa. “And the devaluation of the naira was a factor, because they needed to anchor the money somewhere, and the only way was to buy real estate.”
From Geday’s 21st-floor apartment at 4 Bourdillon, the building boom in Ikoyi, arguably the richest and most exclusive neighborhood in Nigeria, is evident.
Not only are there half a dozen towers, including one right next door, but there are dozens of smaller projects – multi-storey multi-storey buildings or development projects of dozens of houses in the city.
The opulent towers cater to Nigeria’s super-rich, who Knight Frank estimates at around 200,000 or 300,000, for whom money is nothing, and who own second homes in London, Dubai, New York or Miami.
Some analysts are wondering who will live in all of these new properties, especially given the many apartment complexes in the Lekki and Ikoyi neighborhoods that only have a capacity of 30 or 40 percent.
The answer is that it may not really matter, said Timothy Nobi, professor of real estate management at the University of Lagos, given how useful real estate is as a dirty money laundering service.
“There is one school of thought and it is a way of storing capital by people who have no opportunity to take their money abroad, or put their money in the bank – they put their money into property . . . I wish they could sell it years later.
“It’s just crazy. You drive around Ikoyi and you’ll see the entire left side of the street [with buildings] which is vacant.”
This week, the head of Nigeria’s Economic and Financial Crimes Commission, Abdul Rashid Bawa, told Channels TV that “90 to 100 percent” of money laundering was done through real estate.
At Lucrezia’s sales office, Ogundele said he had heard of money laundering as part of the real estate game in Nigeria, but had not experienced it himself. “And there’s no money to steal now anyway!” He joked about the precarious state of the economy.
Given the huge disparities in wealth and opportunity across Lagos and Nigeria more broadly, Nobi said the government should focus on driving investment in affordable housing in a city with a housing deficit of about 2.5 million units and where two-thirds of the population lives in slums. According to United Nations estimates. “We have a mismatch problem in Nigeria’s real estate market,” he said. “What comes to market is not really what people need.”