A report by Estate Intel has revealed that Nigeria’s commercial property market surged in 2024, with transaction volumes hitting $336m, a fivefold increase from $53m in 2023, reflecting growing investor confidence amid economic stability.
According to the report, the real estate market is responding positively with record levels of commercial property acquisition activity.
It stated, “As Nigeria eases into a new era of economic stability, the real estate market is responding positively with record levels of commercial property acquisition activity. In line with our expectations, transaction volumes in 2024 grew fivefold to $336m, up from $53m in the previous year. The growth was primarily driven by acquisitions from income funds and Nigerian corporates seeking to own their headquarters. The effect is visible in the Real Estate Services sector, which has consistently been a leading contributor to quarterly GDP growth, ultimately placing it as the third-largest contributor to GDP at the end of last year, underlining the sector’s central role in Nigeria’s post-reform economic expansion.
The emergence of Nigerian corporates and other owner-occupiers as key market participants through office acquisitions or brownfield and greenfield development is of particular interest. While they do not account for the lion’s share of activity on the acquisitions side, they are a growing segment, driven primarily by relatively cheap asset prices in a high construction cost environment and the desire to avoid the high dollar rents required for Lagos’ A-grade office space.
“In this year’s edition of our Capital Trends report, we take an in-depth look at Nigerian real estate capital markets, identifying key insights around the evolution of capital sources, yield expansion, and the growing interest in brownfield development and renovations. As we approach the end of 2025, the acquisition activity we are tracking is just shy of $50m; however, given the opaque nature of the Nigerian market, it will be a few months into 2026 before all transaction information comes to light. Nonetheless, we are excited, as this new wave of activity indicates that Nigeria is on track to reintroduce its cities as a destination for international institutional capital.”
The report further noted that reforms implemented to stabilise the economy and reinstate investor confidence have shown strong markers of success, especially in recent months.
It added, “Following a four-month period of relative currency stability, the naira has begun to strengthen against the dollar, reaching N1,422/$ at the end of October 2025 in the official window. Foreign reserves have grown in lockstep, now at $42.1bn, the highest levels since August 2019. The recently rebased GDP data places Real Estate Services at 13.3 per cent of GDP in 2024, making it the third-largest sector after Trade (18.2 per cent) and Crop Production (17.5 per cent). Construction sits at the 5th position, contributing 4.7 per cent to Nigeria’s GDP. Together, real estate and construction account for nearly 18 per cent of GDP, underscoring their centrality to Nigeria’s urbanisation and investment story.
“Inflation has also slowed to a 41-month low of 18.02 per cent, albeit with controversial methodologies. Finally, public sentiment has been strong, with the local equity market seeing a bull run that put the country’s benchmark index up 49.88 per cent YTD. Should the current economic recovery continue at its current pace, key commercial sectors, including office and retail, that have passed through hyper supply and the recession phases, will begin to head into ‘Recovery’.
“At this point, asset valuations will begin to rise in response to the improved environment, indicating that acquisition pricing seen in 2024 and 2025 will be the lowest entry point over the next 10-year real estate cycle.”
The report revealed that on average, cap rates for recently completed trades have pushed above the 10 per cent mark, higher than the sub-10 per cent levels noted for select trades in the past decade.
“In Lagos specifically, strong demographic dynamics continue to underpin investment activity in residential. It has been on a bull run since 2020, and there are no major signs that this will slow down in the short term. For the office market specifically, during periods of economic recovery and growth, it is typically the first real estate sector to benefit as businesses expand their footprint or make their first entry. Other sectors, including industrial and data centres, have experienced far more favourable conditions in recent times.
“Since the pandemic amplified the case for data centres as a resilient property sector in 2020, the stock within Nigeria has grown by an average of 21 per cent every year. It is expected to continue doing so till 2030, leveraging the increased attention from key global data centre players such as Equinix, OADC, and Digital Realty. While other sectors have struggled in recent years, the data centre segment has noted consistent growth.
“The market has historically been dominated by local players and investors, including 21st Century Technologies, Jagal (now Rack Centre) and Main One. Between 2020 and 2024, a total of 14 data centres were completed, each with a median capacity of 1.5 MW. Between 2025 and 2030, however, Nigeria is expected to grow from 56.1 MW in data centre capacity to 218+ MW, representing a growth of over 3.7x. Over the next five years, the median capacity of data centres delivered will grow to 4.5 MW, larger than the 1.5 MW noted in the preceding five-year period. While the median capacity is expected to reach 4.5 MW, larger capacity projects exist. Major pipeline projects such as Airtel’s 38 MW Nxtra Data Centre in Eko Atlantic and OADC’s 24 MW Centre along the Lekki Corridor are currently under construction.”
