The Lagos Skyline is Changing
If you make enough friends in Lagos, you’d have a couch to sleep on in every country around the world. That’s just a mental scale for the sheer volume of people Lagos attracts on a daily basis. The megacity of Nigeria often described as one of the fastest-growing cities in the world, has the fourth-highest GDP in Africa. It is home to one of the largest and busiest seaports on the continent.
Lagos may struggle with infrastructural problems, overpopulation and rising insecurity but its skyline is the tallest amongst emerging cities in West Africa. In more developed countries, the government has a heavy influence on the city skyline. This is evident in cities like Dubai, New York and Toronto. However, private individuals, private businesses and international companies, not the government, are responsible for the surge in high rise infrastructure in recent times.
Eko Atlantic, a planned city, is being developed on three and a half square miles of stretch of land reclaimed from the Atlantic Ocean, by South Energyx Nigeria Limited – a subsidiary of the Nigeria-based Chagoury Group of companies. According to David Adeleke, Head of Communications at Eko Atlantic City, this is one of the more obvious examples of how Lagos is urbanising through increased economic growth that is not necessarily influenced by government regulation, policy or investment.
Open City Lagos, a recent publication released by the Nsibidi Institute and Heinrich Böll, reports Lagos has been taking a new path to urban planning by embracing model city approaches, seeking foreign investment and welcoming new technologies in the last 15 years. “A lot of these land areas are being created on water, out of nowhere,” David says.
Eko Atlantic promises sustainable and efficient power and infrastructure, as well as a boost for the economy. According to Business Year, the planned city “is expected to add at least $1 billion to Nigeria’s economy annually”. Ronald Chagoury, vice-chairman of Eko Atlantic who has been involved with its construction since the land reclamation began in 2008 is optimistic. He thinks investors from around the world should be running at the opportunity to own prime real estate in Eko Atlantic before it’s too late.
“The country is growing quickly, and if they are scared about little bumps, this may not be the place for them,” He says. “If, however, they seek long-term growth and success, this is the last frontier. There are always ways of correcting these issues. Solutions exist for any issue. Nigeria is business-friendly, and once one learns how to navigate the hurdles, the benefits offset the challenges.”
It’s hard to dismiss where he’s coming from. Originally founded in 2003, Eko Atlantic is a product of innovative technology, years of data-backed research and billion-dollar investments. Before this, it seemed that all hope was lost for Lagos in terms of urban infrastructural planning.
Kingsley Ighobor, a United Nations public information officer based in New York, wrote, “First-time visitors to Lagos about 10 years ago were warned, ‘This is Lagos.’ That meant that you should not expect help from anyone — but brace up for hard times ahead. Fast-forward to 2016 and the traffic congestion, high crime rate, clogged gutters and roads filled with garbage could soon become just a bad dream. These days Lagosians still regale each other with anecdotes of the dystopian city even as positive changes can be seen in Africa’s most populous city, with 21 million people.”
The factors driving these changes are unsubtle, even though they may not be immediately noticeable to all. Adeola Olatona, an architect in Lagos and former staff of Adeniyi Coker Consultants Limited (ACCL), believes that one of the major driving forces of high rise buildings in Lagos is the cost of land. Nigerians who bought lands in Ikoyi, Lekki and Victoria Island based on land speculations, now sell their plots at high prices. High rises spring up in these locations intending to maximize their lands to accommodate more apartments or commercial spaces.
Due to the difficulty of securing mortgage loans and high cost of building materials, Lagos is witnessing this skyline change side by side, rising cost of rent, real estate ownership and the persistent demand for housing. Last year, Bloomberg reported the megacity has a housing deficit of over 2.5 million units. And there are no indicators, things may be changing for the better any time soon.
Using Lagos State Development and Property Corporation (LSDPC) as a case study, Timothy Oladokun's research paper titled "Public-Private Partnership In Housing Delivery In Lagos State, Nigeria" states that: "LSPDC contributed the highest no of units before 2005 with 322 1-2 bedroom flats, followed by the construction of 144 units of a block of flats and recorded the lowest by the production of 80 units of bungalows. . . the contribution of LSDPC has subsequently been dwindling until 2009 when the organizations developed 164 units of bungalows, 70 semi-detached houses, 51 detached houses and 43 terrace houses." [3] Nothing has really happened since then in the state housing development projects.
Understandably, the current target markets for high rise buildings are luxury living individuals and high net worth companies. Places like Lekki, Victoria Island and Ikoyi are popular for their luxurious lifestyle and affluence. These are also unsurprisingly, the places with picturesque skyscraper buildings and spiked house prices. Biodun, a realtor in Victoria Island, accounts that in some high profiled high rise apartments, prices can range from ₦25 million to ₦40 million per year for rentals. Short-lets through services like Airbnb can cost between ₦15,000 to ₦80,000 per night while buying a two or three-bedroom apartment in a skyscraper building can cost from $1 million dollars and above.
But where rapid urbanisation meets low-income megacity populations, opportunities for ingenious problem-solving also emerge. The entrance of localised new-tech in this landscape is serving the housing needs of young Nigerians, looking to work around the increasing cost of living outside their parent’s home. One particular problem they often face is the low supply of 1-bedroom apartments and studio flats.
Start-ups like Spleet, Muster and Fiber have set-up monthly payment schemes targeted at young professionals. Spleet CEO, Adesola Adesanmi told Stears Business “We have been able to convince homeowners that they can earn higher margins by breaking down their 3 or 4 bedroom spaces into rooms, allowing people to share, [and then house owners can] earn monthly, which inherently results in a higher return on investment.”
However, services like Spleet are only able to unburden Nigeria’s rising millennial middle class from the compulsory one or two years down payments and additional fees, that often chunk-out the bulk of their income. Monthly subscription fees are not cheaper over longer periods or even affordable on a month to month basis. Fisayo Okare of Stears Business says, “The lowest rent fee on Spleet in a shared home is ₦110,000 per month in Lekki Ikate. And this is exclusive of other additional charges such as the ₦5,000 service charge (to cover light, cleaning and repairs), and the ₦60,000 to ₦100,000 refundable damage deposit”.
Unlike residential housing, office spaces in Nigeria have high vacancy rates, due to high rent costs. According to real estate investment solutions company, Northcourt, the cost of renting ‘Grade-A’ office spaces like Wings Building or Heritage Place in Victoria Island and Old Ikoyi respectively, range between $450psm and $700psm.
Businesses that can’t afford these Grade-A office buildings are opting for converted residential apartments. Northcourt’s Real Estate Outlook for 2020 reports, landlords are now open to possibilities of co-working spaces, as well as “payment term flexibility to include profit-sharing”. There’s a spillover of this co-working trend in Nigeria's capital city, Abuja, where the average cost of rent Grade-A buildings is ₦50,000/sqm. Northcourt reports “More service providers are creating products to meet the needs of corporates and start-ups who desire smaller spaces”.
Over the past two decades, sentiments from influential persons or corporations who have authority over state affairs have also changed policies to their advantage through liaisons with foreign investors and the local bourgeois. In 2006, a tripartite agreement between the China-Africa Lekki Investment Ltd., Lagos State Government and Lekki Worldwide Investments Ltd led to the birth of Lekki Free Trade Zone. The project was initially launched as a way of strengthening the bilateral relationship between China and Nigeria through commerce. But that was nearly 14 years ago when the whole world was turning towards globalisation. These days, rising trade tensions between the U.S and China, the U.K’s exit from the European Union and the persisting hesitation of African countries to sign the African Continental Free Trade Area, makes Lekki Free Trade Zone a sort of dream real estate project.
The 30 km2 coastline area that is being developed as Lekki Free Trade Zone, is now one of the leading indexes for local and foreign direct investment in Lagos. In the first decade after the zone was established over ₦100 billion was invested in the area. A bulk of that investment came from Africa’s richest man, Aliko Dangote, who began the construction of his ambitious 650,000 barrels capacity refinery and fertilizer plant (projected to cost a total of $15 billion) in 2017.
However, investments by the Dangote Group have not been the only drivers of the development in the Lekki Free Trade Zone. 22 Free Zone Enterprises (FZEs) and 18 manufacturing firms are currently fully operational in the region. In the year following the start of structural construction for Dangote Refinery, the zone also recorded $735.8 million (about N264bn) in the export of finished goods, earning the Nigerian Federal government N1.6 billion revenue in duties.
But while the increased rate of urbanisation can boost Lagos’ economic status, there are adverse effects. Monica Umunna and Ore Disu in Open City Lagos explain that the consequences of high rise buildings include improved infrastructure standards and new sectors of growth. They also speculate there would be higher exclusion and inequality in areas skewed against investment. “Gated communities created are for middle and high-income classes excluding the poor; low-income jobs and housing destroyed are to upgrade infrastructure; gigantic infrastructural projects destroy the fragile ecological systems along the lagoon and coast.”
Lagos skyline will provide gains for investors, the government and Nigeria, for many years to come, but places like Makoko, Tarkwa Bay and other low-income communities are likely to be affected. For instance, a part of the Lekki Peninsula was formerly known as Maroko, a slum in Lagos. It was destroyed by Raji Rasaki in July 1990 during the military regime in Nigeria. In recent times, Makoko has been posing a problem for real estate enthusiasts and the government. A 2016 article by the Guardian UK highlighted the impact of NGOs and private investors looking to urbanise the slum, but also paints a grim future for such endeavours. "Though cut off from services and plagued by health problems, Makoko displays dynamic adaptive urbanism that could be threatened by its position on prime real estate." the Guardian reported.
Earlier this year Quartz Africa's Yinka Adegoke detailed how the changing Lagos’ skyline will impact local settlements along the coastline. “Since Dec. 2019 alone, at least two dozen slum and waterfront communities have faced eviction at the hands of government officials, says Justice and Empowerment Initiatives (JEI), a legal campaign group that works with the communities”.
This follows a long history of forceful evictions in Lagos and across Nigeria. According to the Nigerian Slum/Informal Settlement Federation, over 2.3 million residents in Nigeria have been forcefully evicted from their homes by the government in the last twenty years. The most recent of such high-casualty evictions was the Lagos State government’s assault on Otodo Gbame. 30,000 residents were rendered homeless unannounced. At least 15 deaths were recorded during the inhumane raid.
As a fast-rising city, the future of the Lagos skyline will bring with it an increased rate of urbanisation and an economic boom for many generations to come. But amidst rising inequality and economic instability, considerations must be given to avoid compounding issues that are bound to arise from rapid development.
United Nations Special Rapporteur on housing Leilani Farha, told Bloomberg, the Nigerian government “Should prioritize improving informal settlements by giving people the right to live there and upgrading infrastructure. That way they would lose their fear of being evicted by police, who regularly raze slums, and invest in their communities”.
Global perception has placed the idea of high rise buildings to be a way of denoting a city’s growth and affluence. But real estate developers may need to consider other alternatives. Danfo Bistros and Dives, an upscale restaurant in Ikoyi, with an architecture designed around two shipping containers stacked on top of each other, is a shining example of the creative ways land areas can be maximised using affordable and recyclable resources. Innovative building concepts like these can also be useful in helping develop coastline communities.
Curbing high property costs aside, Lagos is evolving in real-time; from pre-colonial ancient Eko architecture of rectangular houses with central inner court-yards in well-planned areas to skyscrapers and development projects, capable of creating aesthetics and a mass of wealth for the city. City centres like Alfred Rewane Road, Ikoyi is now home to multinational companies like MTN, British American Tobacco (BAT) and The BBC. In a few years, that stretch of high-rise real estate may rival the commercial heft of traditional business districts like Broad Street, Marina where most renowned Nigerian corporations have been head-quartered for many decades.
Urbanisation also comes along with industrialisation, which means the adoption of new technologies providing revenue for vacant buildings and office spaces. Quartz Africa reported last year that Nigeria, via Lagos, was listed amongst the eight fastest-growing Airbnb markets in the world, signalling a different kind of growth in the hospitality sector. The continued popularity of e-commerce also means warehousing will become a business priority to meet the timely delivery of consumer orders. These developments will bring Lagos a step closer towards its goal of becoming a smart city.
The positives of an urbanising Lagos may not seem like more than middle-class aspirations and wealth-class luxuries, but Rome wasn’t built in a day. And Lagos as a hub for West Africa’s cultural and economic activity will be no different. The Lagos state government projects more public-private partnerships and large-scale private investments areas like Lekki Free Trade Zone will play an even greater role in Lagos’ metropolitan becoming. All the city needs now is for stakeholders to work towards the development of domestic infrastructure, so economic gains from the skylines can be felt by people on the ground.
Edited and Structured: By Toye Sokunbi