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Just across the water The mainland of Lagos, where most of the megacity’s 20 million people live in slums, luxury real estate developers on Banana Island sell multi-million dollar luxury apartments, made in gold, black and cream.
“What we sell is quality,” said Sijibomi Ogundele, executive director of real estate developer and builder Sujimoto, 42, who waved her hand around an apartment in Giuliano di’s apartment building. Doctors. He points to the bathtub designed by Zaha Hadid in the main bathroom: “This design is one of 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 though the wider Nigerian economy has suffered from rising inflation, slow growth and high unemployment.
The driving force is ultra-rich Nigerians looking for a place to park their money in an economy where the central bank has devalued the naira by more than a third against the dollar over the past year.
“We have a niche market: the only one percent of the one,” Ogundele said. “There are not many, their number does not increase. . .[but] these people, no matter how bad the economy is, will buy ”.
The view from Giuliano’s balcony, beyond an empty lot full of building materials and a pair of lazy bulls and big horns, consists of more apartment blocks built by Sujimoto.
The Lucrezia, a 14-story luxury building on the front line, where the apartments will start at $ 1.9 million, features a private Imax cinema. Nearby is the Leonardo, a 25-storey complex that advertises 22 swimming pools and a “virtual indoor golf bar”.
“During Covid, people. . . they didn’t spend money because they didn’t travel, or shopping, or anything, so I think they felt rich, ”Andrea Geday, chief executive of El-Alan, co-developer of the 25-story development of 4 tallest residential building of West Africa. “And the devaluation of the naira was a factor, because they needed to consolidate the funds somewhere and the only way is to buy properties.”
From the floor of the 21st floor of Geday to 4 Bourdillon, the construction boom in Ikoyi, possibly the richest and most exclusive neighborhood in Nigeria, is clear.
Not only are there half a dozen towers going up, including one right next door, but dozens of smaller projects: four-story multi-storey buildings or urbanizations of a dozen cookie-cutter townhouses.
Luxury towers cater to the ultra-rich of Nigeria, which Knight Frank estimates are about 200,000 or 300,000, for which money is not the object, and who own second homes in London, Dubai, New York or Miami.
Some analysts are wondering who will live in all these new properties, especially considering the numerous existing apartment complexes in the Lekki and Ikoyi neighborhoods that have only 30 or 40 percent capacity.
The answer is that it may not really matter, since the utility of real estate is a laundry service for gross money, said Timothy Nubi, a professor of real estate management at the University of Lagos.
“There is a school of thought that is a means of storing capital by people who do not have the opportunity to take their money abroad or put it in the bank; they just put their money into properties. . . and I hope they can sell it years later, ”said Nubi.
“It’s crazy. Drive through Ikoyi and you will see the whole left side of a street [with buildings] which are vacant “.
This week, the head of Nigeria’s Economic and Financial Crimes Commission, Abdulrasheed Bawa, told Channels TV that “90 to 100%” of money laundering was done through real estate.
Ogundele, at Lucrezia’s sales office, said he had heard about money laundering that was part of the real estate game in Nigeria, but that he had never experienced it himself. “And there’s no money to steal right now anyway!” he said, joking about the dire state of the economy.
Given the huge disparities in wealth and opportunities in Lagos and Nigeria more broadly, Nubi said the government should focus on boosting investment in affordable housing in a city with a housing deficit of about 2.5. million units and where two-thirds of residents live in slums, according to UN estimates. “We have this problem of mismatch in the real estate market in Nigeria,” he said. “What comes on the market isn’t really what people need.”
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