NIGERIA’S REAL ESTATE SECTOR ADAPTS TO RISING COSTS

Nigeria’s real estate sector continued to adjust to higher interest rates, rising construction costs and changes in the broader economy in 2025, according to the Nigeria Real Estate Report 2026 by Ubosi Eleh + Co.

The report said fiscal reforms, monetary tightening, exchange rate liberalisation and institutional changes affected capital flows, development patterns and property prices across different segments of the market.

It noted that higher financing costs and increased prices of imported construction materials contributed to delays in project delivery. In response, developers adopted phased construction, smaller housing units and greater reliance on equity financing.

Despite these challenges, the report said demand for housing remained strong, driven by urbanisation, population growth and Nigeria’s housing deficit. Rental housing expanded as rising costs made homeownership more difficult, particularly in Lagos, Abuja and other major cities.

The commercial property market also adjusted to changing business conditions. Many companies reduced office space and focused on efficiency, while demand for Grade A offices and flexible workspaces remained evident.

Industrial and logistics properties recorded strong demand, supported by e-commerce growth, supply chain changes and infrastructure investment. Key areas in Lagos, Ogun and port-linked locations experienced increased demand for warehouses and industrial facilities.

The report also described retail property as resilient but selective, while the hospitality sector recorded improved pricing in key markets.

However, project execution remained a challenge, with more than 60 per cent of planned hotel developments still at early stages, reflecting financing and construction cost pressures.