Rental income in Nigeria remains low, averaging between 3% and 5%, according to Olufemi Seyi, CEO of Casafina Development. Speaking at the unveiling of new housing units in Lagos, Seyi highlighted the challenge of low rental returns and proposed purpose-built investment properties with significantly higher returns of 10% to 15%. The company recently launched 24 one-bedroom apartments in a prime location, offering modern amenities and targeting a 20% to 25% annual return for investors through premium short-term rentals.
Seyi explained that the project, featuring armed security, a rooftop lounge, and proximity to key locations like the airport and Victoria Island, was designed to showcase the potential for greater profitability in Nigeria’s real estate market. Encouraged by the success, Casafina plans to replicate the model with more luxurious developments, incorporating additional amenities like swimming pools and party lounges to attract higher-value tenants and investors.
An estate surveyor, Olorunyomi Alatise, noted that the mismatch between high rents and tenants’ affordability, coupled with informal market structures, hampers rental income growth. However, he emphasized that real estate remains a strong long-term investment due to capital appreciation, inflation stability, and the potential for substantial returns upon property sales, particularly in prime locations.