There was supposed to be an almighty crash in rents in Lagos’ most desirable (and costly) location. Is that really the case? Our research shows that asking rents in Old Ikoyi are proving to be remarkably resilient

The expatriates are leaving Nigeria. Shell will not renew its residential leases when they expire. The world recession has finally caught up with Nigeria’s real estate market. Over 300 new flats have hit the Ikoyi market in the last two years, compared to 100 new flats in the previous five years. Conclusion to all the pessimistic news is that the rental rates in Old Ikoyi were going to see a crash from the glory days of 2008 when average rents were moving towards the $100,000 (N15million) per annum mark for 3 bedroom apartments.

What’s the position now? Well if you believed that you would be able to take your N2.5million and rub shoulders with the like of Femi Otedola, the Ibrus and other highbrow residents of Old Ikoyi, think again and take another look at the box showing advertised asking rents for the location. You may be able to afford the $30,000 (N4.5million) per annum flat in Queens Drive but those offers are few and far between and for you to get one of the really luxurious flats in Old Ikoyi, your budget should start at the $60,000 (N9m) mark and for houses/wing of duplex put aside N10 million. For really extravagant penthouses and the like, agents do not see anything wrong in starting the bargaining process at $185,000 (N27.75m!)

But do these asking prices really translate to tenants? Most agents we spoke to admitted that it takes a considerable time, 6 months to a year to get suitable tenants and most times the owners would have to come down on the amount of rent they were asking for. They admitted that a rebound in rents and quick lettings as in 2008 seemed unlikely, pointing out to the number of apartments that would hit the market in the next twelve months. But this has been postulated over and over and yet rents have not ‘crashed’. Apparently , regardless of the current economic affairs, there were still people ready to pay humongous amounts to live in Old Ikoyi – and many landlords ready to charge those humongous rents

Good to hear rents are being expected to crash in Lagos. I have made rent increases in 2 houses in Enugu in the last 2 months, and nobody packed out. Population is growing, we are now 170 million people and growing, (my neighbor had 4 twins last week) in conclusion, I dont see any rents crashing in the lower end of the rental market in the near future.

its a matter of demand and supply ,not population,if houses are increased in the same area,theyw ill pack out ,since their are alternatives.but in lagos,shell is downgrading its operations and so they will not renew some leaase agreements ,so ,it will increase supply

^^^ doesnt population growth increase demand?

yes true

He is talking of high end mansions not the normal type.