Just across the water from Lagos’ teeming mainland, where the bulk of the megacity’s 20m people live in slums, real estate developers on upmarket Banana Island are selling million-dollar luxury flats, done out in gold, black and cream.
“What we sell is quality,” said Sijibomi Ogundele, the 40-year-old chief executive of real estate developer and construction company Sujimoto, waving his hand around an apartment in the Giuliano di Medici apartment building. He points to the Zaha Hadid-designed bathtub in the master bathroom: “This design is some of the most expensive in the world.”
Ogundele is part of a luxury property boom in Africa’s biggest city that has taken off even as the broader Nigerian economy has suffered soaring inflation, sluggish growth and high unemployment.
The driving force is ultra-rich Nigerians looking for somewhere to park their money in an economy where the central bank has devalued the naira by more than a third against the dollar in the last year.
“We have a niche market — the one per cent of the one per cent,” Ogundele said. “There aren’t a lot of them, their number is not increasing . . .[but] those people, no matter how bad the economy is, they will buy.”
The view from the Giuliano’s balcony — past an empty lot full of construction materials and a pair of lazy, big-horned bulls — is of more apartment blocks being built by Sujimoto.
The Lucrezia, an under-construction 14-story waterfront luxury building where flats will start at $1.9m, features a private Imax cinema. Nearby is the Leonardo, a 25-story complex that advertises 22 swimming pools and a “virtual indoor golf bar”.
“During Covid, people . . . were not spending money because they weren’t travelling, no shopping, no nothing, so I think they felt rich,” Andrea Geday, chief of executive of El-Alan, a co-developer of the 25-story 4 Bourdillon development, the tallest residential building in West Africa. “And the devaluation of the naira was a factor, because they needed to solidify the funds somewhere, and the only way is to buy property.”
From Geday’s 21st floor flat in 4 Bourdillon, the construction boom in Ikoyi, arguably the richest and most exclusive neighbourhood in Nigeria, is clear.
Not only are there a half dozen towers going up, including one right next door, but dozens of smaller projects — four-floor multi-flat buildings or developments of a dozen cookie-cutter town houses.
The luxury towers cater to Nigeria’s ultra rich, who Knight Frank estimates number around 200,000 or 300,000, for whom money is no object, and who own second homes in London, Dubai, New York or Miami.
Some analysts question who will live in all these new properties, especially given the many existing apartment complexes in the Lekki and Ikoyi neighbourhoods that are at just 30 or 40 per cent capacity.
The answer is that it may not really matter, given how useful real estate is as a laundry service for dirty money, said Timothy Nubi, a real estate management professor at the University of Lagos,
“There is one school of thought that it is a means of storing capital by people who have no opportunity of taking their money abroad, or putting their money in the bank — they just put their money in property . . . and hope that they can sell it years later,” said Nubi.
“It’s just crazy. You drive around Ikoyi and you will see the whole left side of a street [with buildings] that are vacant.”
This week, the head of Nigeria’s Economic and Financial Crimes Commission, Abdulrasheed Bawa, told Channels TV that “90 to 100 per cent” of money laundering was done through real estate.
At the sales office for the Lucrezia, Ogundele said he has heard about money laundering being part of the real estate game in Nigeria, but never experienced it himself. “And there’s no money to steal right now anyway!” he said, jokingly about the parlous state of the economy.
Given the huge disparities of wealth and opportunity across Lagos and Nigeria more broadly, Nubi said the government should focus on driving investment in affordable housing in a city with a housing deficit of about 2.5m units and in which two-thirds of residents live in slums, according to UN estimates. “We have this problem of mismatch in the property market in Nigeria,” he said. “What is coming to the market is not actually what people need.”