Lekki Phase 1 remains one of the best residential property markets in Lagos for investors who can afford a high entry cost and due diligence, but no longer a sure thing.
Lekki Phase 1 offers many benefits that are hard to come by elsewhere in Lagos. It is close to Victoria Island, Ikoyi and the major commercial corridors, and has newer housing stock and a wider choice of apartments, terraces and detached homes. Its roads, restaurants, schools, medical facilities and retail outlets have also made it an attractive proposition for professionals, expatriates and corporate tenants.
That demand supports both rental income and resale value. However, investors should distinguish between asking prices and completed transactions. Property listings in Lekki can be optimistic, and a high advertised price does not necessarily indicate what buyers are actually willing to pay.
The best investment is usually a well located property with the right title and good power, drainage, parking and security. Big expensive houses don’t have as wide a tenant pool as apartments near established roads and commercial amenities. Corporate tenants and long term residents may also bring more predictable income than short let guests.
Short-let apartments can yield higher gross revenue, but have higher operating costs, furnishing costs, vacancy risk and demands on management. Investors should also verify the rules of the residents’ association of the building and any relevant Lagos State requirements before assuming that short-let use is permitted.
The risks are substantial. Traffic congestion is an issue in Lekki Phase 1, especially along the Lekki-Epe corridor and during peak hours. We need to look at the flooding and drainage at street level and not just on the developer’s brochure. A place that looks attractive in the dry season may be hard to get to when it rains a lot.
Title verification is equally important. Buyers should conduct searches at the Lagos State Lands Registry and confirm the property’s registered interest, survey plan, planning approvals, outstanding charges and any mortgage or litigation. For apartments, the buyer should also examine the deed of assignment, building approvals, service-charge history and the residents’ association’s financial obligations.
Operating costs can materially reduce returns. Service charges, diesel or generator costs, security, repairs, insurance, agency fees and taxes should be included in any yield calculation.