Nigeria's property industry has become a major contributor to national economic output, representing 13.10 percent of real gross domestic product during the first quarter of 2026. Punch, citing a Knight Frank market update published on Monday, reported that construction activity grew by 6.38 percent compared to the same period last year. The report noted this expansion is occurring as headline inflation has slowed to 15.91 percent in June, down from 25.29 percent a year prior.
In Lagos, a shortage of formal housing supply has pushed residential rents higher in prestigious neighbourhoods. According to Punch, prices in areas including Ikoyi, Victoria Island, Banana Island, and Lekki Phase 1 have more than doubled since 2023. Tenants are now seeking more affordable alternatives on the mainland, favouring smaller units like studios and compact flats. Rail expansion projects along the Lekki-Epe corridor are also extending property development into suburban zones such as Ajah and Ibeju-Lekki.
Commercial real estate performance varies by asset type and location. Grade A office space in Lagos has seen rents stabilise near $55 per square metre per month, with landlords offering fit-out incentives and flexible lease terms to retain tenants. Industrial properties in Alaro City and the Lagos Free Zone charge between $4 and $6.50 per square metre monthly. In Abuja, capital values in the Guzape I and II districts rose by 20 to 30 percent, while commercial rents in established business districts increased by more than 10 percent in the first half of the year.
Frank Okosun, senior partner and chief executive of Knight Frank Nigeria, observed that market resilience is now highly dependent on specific locations and asset types. He noted that while infrastructure projects can create new opportunities, developers must also address affordability pressures and operating costs. Daniel Fabi, the firm's lead research analyst, added that tenants across major cities are prioritising functional value, with residential demand dividing between premium properties and budget-friendly alternatives.