Rental yields hit 5.5% in Lagos luxury property market

Luxury real estate in Lagos is recording average rental yields of 5.5 per cent annually, making it an increasingly attractive investment option for both local and international buyers, according to the latest State of Lagos Housing Market Report (Volume 3). The report, published by the Roland Igbinoba Real Foundation for Housing and Urban Development (RIRFHUD), […]

Luxury real estate in Lagos is recording average rental yields of 5.5 per cent annually, making it an increasingly attractive investment option for both local and international buyers, according to the latest State of Lagos Housing Market Report (Volume 3).
The report, published by the Roland Igbinoba Real Foundation for Housing and Urban Development (RIRFHUD), highlighted that the combination of capital appreciation, growing demand for luxury homes, and the short-let rental boom has positioned Lagos’s high-end property market as a strong performer in Nigeria’s real estate landscape.
Covering findings from field surveys, satellite mapping, and property market analytics, the report offers a comprehensive overview of the Lagos housing market. It noted that the luxury segment, currently valued at over N3.2 trillion ($7.5 billion), is growing at an annual rate of 6 to 8 per cent, with property prices rising by 25 per cent in 2023 alone.
The report identified Ikoyi, Victoria Island, and Lekki Phase 1 as key investment zones where high-end residential assets continue to attract significant interest due to their location, amenities, and rental potential. These areas are also benefiting from the rise of short-let accommodations, which offer higher returns for property owners.
“A unique feature of the Lagos market is the dominance of rental housing,” the report noted. “Over 70 per cent of residents live in rented homes, and most luxury properties are investor-owned, not owner-occupied.”
Commenting on the findings, the Executive Vice Chairman of RIRFHUD, Dr. Roland Igbinoba, called on the Lagos State government to accelerate the implementation of its electronic Geographic Information System (e-GIS), which is aimed at digitising land-related approvals and records across ministries and agencies.