Historically the real estate development market in Nigeria has been vibrant. Even so, if the current world economic slump began to take suppress in September 2008, it drained the confidence coming from many investors and the nose-dived coupled with general economic situation. But with the signs of economic recovery beginning to take hold again, what prospects are there for upset in the economic property store?
When industrial and commercial property prices reached a new low, it signaled a couple of things. Firstly that the market was severely depressed and was likely in which to stay that way for several years, but that the bottom of the trough were definitily reached and that the greatest out, was up. Is not market having stabilized at its new low, it meant that the glut of distressed properties that had been pouring in had stopped, and together with laws of supply and kent ridge residence demand in operation, that’s not a problem excess of supply far outstripping demand, prices remained depressed.
However, given out 12 months has seen the indications of recovery taking place in the commercial sector, by means of property prices still artificially low, it 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 a good example of the current optimistic outlook. With economic forecasts being positive, albeit slow-moving, and prices being under they are, now is a good time to order. As confidence returns to the economy, the potential for new letting agreements is rising and properties are once again beginning to move, bringing about a slow but steady rise in prices and rates. It can be forecast this specific trend will continue slowly but surely, depleting the supply surplus that eventually trigger a new bout of property development taking place.
Current thinking is this specific may well lead with regard to an industrial property boom in 2014/15. However with such a 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 those things end up being in place before actual construction will start to take place.
All within all this has grown a very positive time for property development. Industrial property investors have every reason to get cautiously optimistic, as simple to medium term prospects are looking very positive, and it is now time to speculate and make an investment.