Lagos’ short-let market generated an estimated N281.03bn in revenue in 2025, holding steady despite high inflation and intensifying competition, according to a report from Edala Development.
The Lagos Shortlet Market Report 2025 notes that while the sector’s phase of rapid, unregulated growth is ending, it remains a key contributor to the city’s real estate economy, with revenues projected to climb to N285.5bn in 2026.
Population growth and economic scale continue to underpin demand. With nearly 27 million residents, Lagos is Africa’s largest commercial hub and a magnet for both domestic and international investors.
According to the new report, Lekki is the largest revenue driver, with Phase I and Phase II accounting for nearly N165bn combined in 2025, followed by Victoria Island, whose revenue nearly doubled to N34.8bn.
Meanwhile, Banana Island experienced a sharp decline, dropping to N9bn due to regulatory suspensions, with projections for 2026 showing a further fall to N1.5bn as short-let activities were completely suspended as of February 2026.
“The Lagos short-let market is transitioning from a boom driven by opportunistic growth to a more professional, compliance-driven industry,” the report stated. Success in this new phase now relies on strategic investment, professional management, and adherence to stricter estate regulations, it added.
Mainland Lagos is emerging as the next frontier for investors, with Ikeja, Yaba, and Gbagada showing steady revenue growth, signalling opportunities in areas less saturated than the traditional island markets. Surulere, however, saw a decline in revenue to N6.15bn, reflecting market adjustments amid regulatory resets.
Infrastructure development is further bolstering the sector. The Lagos-Calabar Coastal Highway advanced during 2025, with 47 kilometres completed and temporarily opened, signalling early momentum on the proposed 700-kilometre corridor.
Planning and preliminary works have commenced for the Lagos Green Line Rail Project linking Marina to Lekki, while construction continues on the Sokoto-Badagry Superhighway, enhancing access to the Agbara industrial corridor. The Lagos State Government also launched the €410m Omi Eko Project, aimed at expanding inland waterway transportation and easing pressure on road networks.
“Over the past few years, the sector has grown rapidly due to rising demand from corporate travellers, tourists, digital nomads, and investors seeking high-yield real estate opportunities,” the Co-Founder and CEO of Edala Development, Temidayo Oloyede, commented.
“In our 2024 outlook, we projected the Lagos short-let market would reach N300bn by 2025. While the market continued to expand, our tracked data indicates that 2025 revenue closed at an estimated N281.03bn. This shortfall reflects a maturing market where demand remains strong, but the rapid increase in supply is making it more difficult for every property to maintain high occupancy levels.”
Beyond business travel, Lagos has evolved into a global leisure and lifestyle destination. The city now hosts major international events, with over 200 taking place during the festive season, attracting more than 1.2 million tourists. Many of these visitors seek premium short-term residences that offer comfort and proximity to the city’s vibrant nightlife.
