As Nigeria slowly reopens its economy and conversations shift to exploring post-pandemic possibilities, real estate practice in the country and the world at large will change, opening investors and property owners to new opportunities and challenges.
“This new normal will vary depending on each asset class in the Nigerian real estate sector,” said Najeeb Adeyemi, Head, Valuation/ Business Development, at Lagos- based Mustapha Ewenla & Partners. “This will vary in terms of demand, design and construction, lease arrangement and management, mode of inspection, and so on.”
Adeyemi noted that the dire need for “a home” has given rise to an increase in hitherto neglected types of properties such as studio apartments.
Investors and developers, he said, will take advantage of relief funds, lower interest rates, mortgage moratoriums, and tax concessions to build and or buy more residential units. Also, investors with sufficient cash are taking advantage of distress sale opportunities from owners who need cash to keep up with the immediate economic repercussion of the pandemic.
For the corporate office asset class, it was largely affected during the lockdown period and worsened by the work-from-home order.
“This has further damned the need for offices and reduced business engagements such as meetings, training and trading as all of these have swiftly gone online through technology such as social media and video conferencing applications like Zoom, Microsoft Team, Webex, Google Meet, etc,” said Adeyemi.
Post-pandemic, the real estate expert believes, the design and construction style of office spaces will begin to shift from open plan to cellular and partitioned offices due to less demand for it arising from remote working and social distancing measures.
The demand for retail outlets and warehouses will be shaped by increasing adoption of e-commerce amidst social-distancing rules.
Adeyemi said that as e-commerce and online businesses begin to experience record increase in sales through technology and internet, warehouse and fulfilment centre spaces are already and will continue to be in huge demand as logistics business has also expanded massively.
As an essential activity sector, healthcare is expected to continue to boom and that segment of real estate is tipped to enjoy growth even post-pandemic.
For education real estate, Adeyemi said that there has been an increase in default in rents for properties rented for education and educationrelated businesses due to the lockdown and the trend continue as long as the schools are locked up. He believes that with the online course industry estimated to worth $320 billion in 2025, learning from home will soon become the order of the day.
Social distancing will largely affect the demand for and patronage of recreational businesses especially in the short term, and as long as the lockdown and social gathering restriction remain and the future of the recreational real estate, events and hospitality will depend on behavioural changes post-pandemic.
Properties used for industrial and manufacturing purposes are usually on long leases above 5 years, therefore, the effect of the pandemic on its rental obligations, and the owners will not be felt immediately, said Adeyemi.