How we made it in Africa asked Olaide Agboola, CEO of Purple Real Estate Income Limited, about opportunities in Nigeria’s property sector. Here are slightly edited highlights from the exchange.
On student accommodation
“Youth occupy the largest demographic in Africa; students occupy the largest demographic in Nigeria. There is a tremendous opportunity to invest in safer student accommodation that empowers the next generation through stimulating environments for education and well-being.
“As the number of students within private and public universities increases, so will the demand for purpose-built student accommodation. Emerging Africa Infrastructure Fund’s partnership with Acorn Holdings in Kenya and Growthpoint’s recently-launched unlisted student accommodation real estate investment trust in South Africa, received strong market interest. Purple is also ready to get behind purpose-built student accommodation – an emerging asset class we expect to thrive in Nigeria and Africa.
“To respond to the housing crisis for students, we are partnering with investors to develop projects that build affordable modular short-term student accommodation with containerised units housing at least 600 students. The asset class provides compelling investment opportunities; however, the development of the properties is one part of the puzzle. We want to encourage the construction, maintenance, and development of modern public and private education institutions as effective learning environments to foster the completion of university courses.”
On low-income housing
“The Covid-19 pandemic changed how we live and work by underscoring the value of hybrid-use properties and all-inclusive living. This informs how we design, develop, and manage spaces. We see a growing opportunity in low-income housing, facilitating access to homeownership to more significant segments of society.
“We must create new systems that democratise access to real estate ownership for as many Nigerians as possible. We are seeing new models entering the market through short-let apartments and rent-now pay-later (RNPL) credit solutions designed for citizens with lower incomes. Some of these innovations harness the rise of technology and property management platforms. They have the potential to drive the real estate market to new heights – catalysing investment to novel technologies that enable smarter cities and boost access to property ownership.
“We have partnered with the Bank of Industry and Keystone Bank to expand our offering. We are exploring partnerships with domestic and international development partners to bring more attractive yet inclusive and affordable properties to the market.”
On cities of opportunity beyond Lagos
“Undeniably, Lagos offers compelling property development opportunities; however, we are keen to cast our net wide and seek out other opportunities in Nigeria and beyond. We have identified investment opportunities in other strategic urban and cultural centres. Abuja, Ibadan, and Benin City are vibrant cities with growing industries and populations enabling economic inclusion, physical security, and broader economic development.
“Abuja is one of the fastest-growing cities, not only in Nigeria but in the world. The increasing population in Abuja means further demand for housing, which means rising real estate value for investors and developers. Additionally, less than 50% of Abuja’s districts have been developed. Plenty of underdeveloped land means there is an opportunity to create many kinds of real estate: residential, commercial, modern shopping centres, mixed-use developments, and industrial properties. The potential is tremendous.
“Ibadan also offers excellent prospects for property development thanks to the recently completed Lagos-Ibadan standard gauge railway and government incentives actively seeking to attract investors to Oyo State. The dramatic increase in land costs in Lagos State means buyers will be looking elsewhere to invest. Oyo State offers strong potential as the government actively focuses on building support infrastructure and access roads and addressing some of the state’s major business priorities. The Oyo Ministry of Trade, Investment and Cooperatives recently stated that they are willing to offer discounts of up to 80% on land costs for non-PPP investments.
“Additionally, Benin City the capital of Edo State, offers great prospects for development. Its exceptional history and cultural heritage continues to drive increased tourism in the area. This will boost economic growth and see the region attracting more development interest.”