Even for a non-Lagos resident, the mere mention of places
like Lekki, Ikoyi and Victoria Island paints a picture of a geographical milieu
characterised by high-rise buildings, pricey real estate, Fortune 500 companies
and generally a physical elegance that is attributable to a highbrow area
majorly occupied by the elite gentry of the society.
The result of this upscaling and hype, which typically comes
with it, is that the price of real estate typically rises above the purse
strings of the average citizen. As a matter of fact, recent trends in the real
estate sector suggest that the prices of landed property in these areas may
well be above the reach of the middle class.
One project in the real estate sector which currently seeks
to, yet again, take this upscaling to another level is the Eko Atlantic City.
Initially conceived in 2003 as a solution to environmental hazards arising from
the flooding of the Lagos bar beach, the Eko Atlantic project has snowballed to
play host to one of the most expensive real estate locations in Africa, with a
square metre of land now selling for almost $2,000.
Eko Atlantic is an entirely new coastal city being built on
Victoria Island adjacent to Lagos, Nigeria. It is a focal point for investors
capitalising on rich development growth based on massive demand – and a gateway
to emerging markets of the continent.
Prior to the conceptualisation of the project, the expanse
of real estate, now known as Eko Atlantic City, was a beach on the Atlantic
Ocean along the shoreline of Lagos (Lagos Bar Beach), situated on Victoria
Island. For a long time, it was the most popular beach in Nigeria, especially
when Lagos was the capital of the country.
From the early 1970s to the late 1980s, during the military
regime, Bar Beach was a site where many convicted armed robbers and coup
plotters were executed by firing squad. It was always a public spectacle, with
thousands of spectators, including television cameras and print journalists
swarming around.
The first-ever public execution in Nigeria took place at Bar
Beach in 1971; it was the execution of Babatunde Folorunsho, for armed robbery.
Others included those of Joseph Ilobo, Williams Alders Oyazimo, Lawrence Anini
and Dr. Oyenusi in the 90s.
However, over the years, Bar Beach has developed a
reputation for overflowing its banks and claiming lives and property. Many
times, the Ahmadu Bello Way, the road closest to its banks, was closed for
safety reasons. Studies showed that between eight and 14 metres of the
beach-front were eroded annually along Bar Beach.
In 2003, the idea of a modern city on the Atlantic coast was
publicly discussed. It would be sited on what used to be Bar Beach, out of the
reclaimed land. It would be called Eko Atlantic City, a residential and
business district “standing on 10 million square metres of land reclaimed from
the ocean and protected by an 8.5-kilometre-long sea wall.”
In 2005, the then Lagos State Governor, Bola Ahmed Tinubu,
in a letter addressed to President Olusegun Obasanjo and titled ‘Permanent
Solution to the Bar Beach’ sought the latter’s approval for the reclamation of
the coastal land on behalf of a private investor that would convert the
liability to an asset that would benefit Lagos State and the Nigerian people at
large.
A copy of the request letter, sighted by our correspondent,
said the committee which examined the proposal by the company found it
competent and financially viable to provide a permanent solution to Bar Beach
and convert it to a first-class tourist resort.
That same year, President Olusegun Obasanjo gave an approval
for the commencement of the project. The approval was on the condition that the
development project be strictly supervised to ensure that it did not stray
beyond the confines of the law, as well as the gambit of the approval given to
the company. In 2008, the construction of the new city began.
As of May 2009, while the site was being dredged, about
3,000,000 cubic metres (equivelent to
3,900,000 cu yd) of space were sand-filled and placed in the reclamation area,
while about 35,000 tonnes of rock were delivered to the site.
In 2016, Eko Atlantic City was commissioned by the then
Lagos State Governor, Akinwumi Ambode.
Standing on 10 million square metres of land reclaimed from
the ocean and protected by an 8.5-kilometre-long sea wall, Eko Atlantic is
projected to be the size of Manhattan’s skyscraper district. Self-sufficient
and sustainable, it includes state-of-the-art urban design with its own power
generation, clean water, advanced telecommunications, spacious roads, and
tree-lined streets.
The project is privately funded by South Energyx Nigeria
Limited – the developers/city planners and a subsidiary of the Nigeria-based
Chagoury Group of companies – working in strategic partnership with the Lagos
State Government and supported by the Federal Government of Nigeria.
Notable national and international banks have been quick to
capitalise on the opportunities with some of Nigeria’s biggest – FCMB, First
Bank, Access Bank and Guaranty Trust Bank – partnering with Eko Atlantic, with
support from BNP Paribas Fortis and KBC.
On March 31, the US consulate in Nigeria officially broke
grounds on its new consulate building. Located on a 12.2-acre site in the
rapidly developing Eko Atlantic City, the new US consulate general in Lagos
will support diplomatic and commercial relations between the United States and
Nigeria and will provide American and Nigerian Consulate employees with a safe,
secure, sustainable, and modern workplace, a statement by the American Embassy
said.
While weighing in their views, experts have cited factors
ranging from security, quality, to the hype surrounding the project as reasons
the cost of real estate at the coastal city is high.
In a chat with our correspondent, the Managing Director of
MDS Properties, Mr David Mba, said the design of Eko Atlantic City had made it
attractive to potential investors, hence the surge in demand despite its
above-median cost.
He said, “There are many drivers that determine prices. One
of them is the general inflationary rates. Two, this forex challenge that we
are having in the country has an impact on virtually everything, from the
commodity side of things to the real estate side of things. Everything is
impacted. Three, there’s an uptick in demand. You know whenever there is
demand, prices rise. Whenever there is a demand slump or over-supply, prices
fall. What you are seeing at Eko Atlantic is also visible and mirrored in
Banana Island as well, where prices are over a million per square metre.
“There is also this need for people to come into a place
that is highly secure. Eko Atlantic City is larger than the entire Victoria
Island. It is about two times the size of the entire Victoria Island. It is
also a well-secured environment. So, there is a definite yearning for people to
want to move into that place.”
On the other hand, the CEO of Global PFI, MKO Balogun, cited
the cost implication of developing a city of that distinction as an inevitable
reason why cost of real estate there would be considerably high.
“It’s a new creation. There’s a lot of costs that go into
developing a new city, especially when you have to do reclamation. I don’t
think it’s that expensive; the only reason we can say it’s expensive is to
compare it with similar cities around the world. The cost of developing it is
not what a local content will cost. If you follow the development of the city,
you will find the calibre of consultants and engineers who have worked on
developing the sand bank first before they start developing the city. There is
a lot of cost that goes into that, so I don’t think it’s too expensive.”
According to Balogun, first-rate real estate development
projects in Lagos, particularly on the Island, are creating a price dichotomy
in the market, even with gentrification projects geared towards taking
advantage of the strategic locations in Ikoyi as well as other high-brow areas.
He continued, “There are two other things you can also
consider. Even in Lagos, when Banana Island first started, how much was the
cost then and how much is the cost today? There is the new Lagos, it is another
city being developed. What’s their current rate? It’s always from that
perspective we can say whether the cost for Eko Atlantic is out of reach. I
don’t think it is. Even in Ikoyi, if you look at the rate of properties in
Ikoyi, the old Ikoyi that a lot of people are redeveloping, you will find out
that it is almost at par with Banana Island, almost 70 per cent the cost of an
average property in Banana Island.”
The Marketing Manager of a Lagos-based real estate firm, The
Address Homes, Segun Ogunbiyi, also believed the cost of developing the coastal
city was not unconnected with its exorbitant price.
According to him, the decision to buy real estate in the
coastal city, for most firms, go beyond the hype associated with the project.
He added, “There are many factors: infrastructure is
top-notch, and also the location. It is also privately owned; it is not
government land. They’ve done a lot on the land. They’ve done sand-filling.
They’ve done drainage; they’ve done a lot of things. It commands its own value.
It is just unique on its own.
“In terms of comparative analysis with other emerging
extensions, you find yourself within an environment where you are sure of 24 hours
of power supply. You are sure of security 24 hours. You are also sure of the
class of people you are meeting. It will increase your network, and when you
increase your network, you increase your net worth.”
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