LFTZ: Catalyst for Real Estate Market, Urban Growth
The United Nations projects that Nigeria's population will cross the 250 million mark by 2030. An estimated 10th of this figure will live and work in Lagos in an estimated area of 356,861 hectares of which 75,755 are wetlands. To the Lekki Free Zone (LFTZ), this presents development opportunities for real estate developers. Through the LFTZ, the host communities are also being transformed into a new haven for the upwardly-mobile. MUYIWA LUCAS writes.
About a decade ago, Mr. Anthony Konyeaso, an Engineer, declined an investment offer in real estate in Ajah area of Lagos State. His refusal to buy a plot of land in that region then was quite understandable given the difficulty of accessing the area and infrastructural deficit in the region.
But things are changing now on the axis. Just about a month ago, Konyeaso became the last of a close circle of eight friends, all middle-aged professionals, to relocate from Surulere to Ibeju-Lekki axis of the state.
The group typifies a slow but growing exodus of middle-income earners from the Lagos Mainland to Island communities, now considered affordable to either build or rent residential apartments. Such movement is being hastened by the relief of commuting along this corridor, which hitherto posed a hydra-headed problem for residents and workers on the Lagos Island.
"The major works done by the state government on the Lekki-Epe Expressway has reduced the traffic congestion that used to be a problem for people living after Ajah," explained Konyeaso.
This, he further explained, is why several undeveloped estates in that area have suddenly experienced rapid development of houses. Besides, he noted that houses that used to be unoccupied in the area were now being filled as more people move in.
Indeed, such is the rush to the Ibeju-Lekki corridor for realtors and other property owners, now positioning for the mega opportunities offered by the axis. While many see the area as the 'new Lagos', Konyeaso is convinced that the stimulant for the surge in real estate development in the region is based on the Lekki Free Trade Zone (LFTZ).
His position on this may not be wrong. For any gigantic project comes with several opportunities. The LFTZ, an ambitious 16,500-hectare business hub, is a joint venture between the state government and private investors. It is expected to create an estimated 300,000 jobs and significantly boost the state's gross domestic product (GDP).
According to the Commissioner for Commerce, Industry and Cooperatives, Rotimi Ogunleye, the net value of infrastructure at the zone stands at $4 billion. He also revealed that 116 investors had registered with the zone; with 16 already operational. "The Lagos State Government has, in the last two years, released N698.47 million as part of the stateâ€™s equity contribution to the joint venture," he said.
To further boost its commitment to the project, Governor Akinwunmi Ambode last March pledged to accelerate financial commitments to the zone. And to match his words with actions, Ambode announced an additional $62 million funding to be released to the project over the next six months. This is to be borne by the government and the China Africa Lekki Investment Limited, one of the partners on the project. The governmentâ€™s commitment to start work on the Lekki Deep Sea Port as well as critical roads in the zone has been welcomed by investors in the zone and this is expected to accelerate investments going on in the zone. Dangote Group, which is the biggest private investor in the zone, is said to have invested about $4 billion in its refinery, fertilizer processing plant, gas pipeline project and a petro-chemical plant projects so far.
Rising estate development
The massive scale of these projects has already spurred a spike in real estate value within the Ibeju-Lekki axis as developers scramble to provide housing to the estimated 1,000 workers on the projects. During a business luncheon in Lagos, the Nigerian Institute of Estate Surveyors and Valuers (NIESV) urged its members to take advantage of the opportunities in the zone by investing in real estate development within the area.
"The times are very exciting for us as real estate developers and residents here because we cannot even stop dreaming of the opportunities it will bring to this area when completed. At present, our property business is on the upswing, so can you imagine what it will be like when the LFTZ is operational?" asked Sunday Michaels, a developer in one of the estates along the corridor.
He admitted that the opportunities, such as the growing real estate development in the Ibeju-Lekki region, had been triggered by the potential of the LFTZ. Besides, Michaels explained that "traffic is easier; the air seems cleaner here; and, most importantly, everyone is talking business opportunities that may arise because of the zone."
However, experts warned that there was work to be done to sustain the excitement in the zone and ensure that the objectives were realized. The proposed sea and air ports as well as access roads to the zone, were critical to the success of the project. The objective of free trade zones is to spur manufacturing and export of such goods to boost the contribution of goods exports to the Gross Domestic Product (GDP).
The Lagos Free Zone is expected to be Nigeria's biggest example of this. Ambode has so far shown that he realises this and is committed to facilitating these critical enablers. "It is clear that we have to dualise the Lekki-Eleko Road beyond the zone to withstand the influx of vehicles that will be making use of the road to access the zone. With this, we will be able to sustain the investments in the area," he said.
While the zone, undoubtedly, presents immense opportunities to all stakeholders, it has also faced criticisms from experts as being too undefined. This is an area that the state government and urban development investors in the zone are working to address.
One of the private investors in the zone, Rendeavour Nigeria Limited, which specialises in unique satellite city concepts, seems to have shown promise on what real estate development should be in such areas.
The firm, a force in Africa's urban land development, has invested in about 30,000 acres across Nigeria, Kenya, Ghana, Zambia and the Democratic Republic of Congo. It is, therefore, instructive that Rendeavour has committed to developing 1,000 hectares within the LFTZ, with provision of critical infrastructure that would further aid urban development in the axis.
Alluding to the efforts and initiatives of his firm, Rendeavour's Head of West Africa Operations, Mr. Yomi Ademola, said the firm's efforts in other countries where testify to its credibility. He explained that a 5,000-acre city in Tatu, Kenya being handled by the firm is the country's second largest project. The project, he explained, has attracted thousands of residents as well as foreign firms looking for manufacturing area in well-developed and managed spaces.
"In Nigeria, specifically in Abuja and Lagos, we plan to replicate what we have done elsewhere, which is to invest in helping create world-class infrastructure that will help sustain and accelerate economic growth, meet the aspirations of a burgeoning middle class and serve as a catalyst for urban development," Ademola added.
Culled from The Nation Newspaper, June 2017