The growth of the Nigerian Real Estate sector in 2021 was the focus of experts and analysts at the North Court forum in Lagos. It was a hybrid event (physical and virtual) that followed the protocols of organizing an event in the advent of the COVID-19 pandemic.
Experts and analysts at the forum reflected on the previous year 2020 and the coronavirus that emerged as a singular risk that hit the global economy.
The pandemic disrupted the global supply chain and slowed down economic growth across the globe. It also adversely affected the Oil and Gas, Aviation, Hospitality, Tourism, Manufacturing, and Entertainment sectors.
Mr. Ayo Ibaru, Chief Operating Officer, North Court, in his presentation, highlighted the fact that three economic scenarios will shape the real estate sector in 2021;
- Economic recovery
- No change (current economic scenario remains) and
- Economic decline
The CEO of Dutum Construction Mr. Tope Runsewe listed the following as key trends to watch;
- Growth in the demand for quality delivery,
- The rise in the price of important materials (local suppliers, backward integration),
- A rise in the demand for indigenous construction firms and
- An improvement in the local expert pool due to the return of indigenous experts
The discussion featured a panel session that revealed what stakeholders and investors should expect in the sector, which are; the pace of conversions from residential to the office will accelerate, increase in demand for residential estate, gated communities will be in demand (especially for 3 and 4 beds), Grade A office vacancies are expected to increase, rentals above $350 per square meter may experience challenges securing tenants.
According to the North Court Real Estate Outlook report for 2021, “Central business districts are no longer the undisputed destination for new developments. Some suburbs are now under strong consideration as developers are choosing, as they did in the 2018 recession, to take more research-driven decisions. Both retail and office landlords are changing to remain attractive”.
The report also added that Real estate investment managers were embracing technology more intently to accurately forecast performance metrics.