Home BUSINESS Lagos mansion: “No matter how bad the economy is, they will buy it”

Lagos mansion: “No matter how bad the economy is, they will buy it”

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Just across the water The rich continent of LagosMost of the 20 million people in big cities live in slums, and real estate developers on the upscale Banana Island are selling multimillion-dollar luxury apartments in gold, black and cream.

“We are selling quality,” Sijibomi Ogundele, a 42-year-old real estate developer and CEO of construction company Sujimoto, waved around an apartment in the Giuliano di Medici apartment complex. He pointed to the bathtub designed by Zaha Hadid in the master bathroom: “This design is one of the most expensive designs in the world.”

Ogundele is part of the luxury real estate boom in Africa’s largest city, which has taken off despite the fact that the broader Nigerian economy suffers from soaring inflation, slow growth and high unemployment.

The driving force is that super wealthy Nigerians are looking for places where they can store their funds in economies whose central bank depreciated more than a third of the dollar last year.

“We have a niche market—one percent of one percent,” Ogundel said. “The number is not large, the number has not increased…[but] Those people, no matter how bad the economy is, they will buy it. “

The view from Giuliano’s balcony—passing a clearing filled with building materials and a pair of lazy big horn bulls—is more apartment buildings that Sujimoto is building.

Lucrezia is a 14-story oceanfront luxury building under construction. Apartments start at $1.9 million and feature a private Imax cinema. Nearby is Leonardo, a 25-story complex marked with 22 swimming pools and a “virtual indoor golf bar”.

“During Covid, people… didn’t spend money because they didn’t travel, didn’t shop, didn’t have anything, so I think they feel rich,” El-Alan CEO Andrea Geday is a 25-storey 4 Bourillon The co-developer of the development project, the tallest residential building in West Africa. “The devaluation of the naira is a factor because they need to consolidate funds somewhere and the only way is to buy real estate.”

Judging from Geday’s 21-story apartment at 4 Boudillon, Ikoyi is arguably the richest and most unique neighborhood in Nigeria, and the construction boom is obvious.

Not only are six towers rising from the ground, including the one next door, but there are also dozens of smaller projects—four-story multi-storey buildings or dozens of uniform townhouse developments.

The luxury tower caters to the super-rich in Nigeria. Knight Frank estimates that their number is about 200,000 or 300,000. Money is not a problem for them, and they have a second house in London, Dubai, New York or Miami.

Some analysts questioned who will live in all these new properties, especially considering that the capacity of many existing apartment buildings in the Lekki and Ikoyi communities is only 30% or 40%.

Timothy Nubi, a professor of real estate management at Lagos University, said that given the usefulness of real estate as a dirty money laundry service, this may not be important.

“There is a school of thought that this is a means for people who have no chance to take money abroad or deposit money in banks to store capital-they just put the money on property… and hope they will be able to do so in a few years. Sell ​​it,” Nubi said.

“This is crazy. You drive around Ikoy and you see the entire left side of a street [with buildings] Those that are empty. “

This week, Abdulrasheed Bawa, head of the Nigerian Economic and Financial Crime Commission, told Channels TV that “90% to 100%” of money laundering is done through real estate.

At Lucrezia’s sales office, Ogundele said that he had heard that money laundering was part of the Nigerian real estate game, but he had never experienced it himself. “There is no money to steal anyway!” he said, jokingly talking about the dangerous situation of the economy.

In view of the huge wealth and opportunity gap between Lagos and Nigeria on a larger scale, Nubi said that the government should focus on promoting affordable housing investment in cities with a housing shortage of about 2.5 million units and two-thirds of residents living in slums. , According to United Nations estimates. “We have a mismatch in the Nigerian real estate market,” he said. “What enters the market is not actually what people need.”

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