Historically the real estate development market in Nigeria has been vibrant. Even so the current world economic slump started take suppress in September 2008, it drained the confidence associated with many investors and the nose-dived coupled with general finances. But with the signs of economic recovery beginning to be able to hold again, what prospects are there for an upsurge in the commercial property market?
When industrial and commercial property prices reached a good solid low, it signaled two things. Firstly that the market was severely depressed and was likely to stay that path for several years, kent ridge residence but as well that the bottom of the trough had been reached and that the only way out, was up. With the market having stabilized at its new low, it meant how the glut of distressed properties that were actually pouring in had stopped, and together with laws of supply and demand in operation, that’s not a problem excess of supply far outstripping demand, prices remained depressed.
However, the last 12 months has seen the warning signs of recovery developing in the commercial sector, other than property prices still artificially low, this has begun to stimulate demand, as property development speculators are one again sensing the opportunity of making good short to medium term returns on new investments.
Office properties in particular are certainly one of the current optimistic outlook. With economic forecasts being positive, albeit slow-moving, and costs being as low as they are, now is an excellent time purchase. As confidence returns to the economy, the opportunity for new letting agreements is rising and properties are much more beginning to move, creating a slow but steady rise in prices and rates. Usually forecast that trend continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking place.
Current thinking is this kind of may well lead to an industrial property boom in 2014/15. Certainly with any long gestation period moms and dads developments arrive at final fruition, the process needs to get kicked off now. Feasibility studies, surveys, finance – all of these things should be in place before actual construction can begin to be fulfilled.
All in many this has grown a very positive time for property development. Industrial property investors have every reason to cautiously optimistic, as of course to medium term prospects are looking very positive, and it is now time to speculate and invest.