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Real Estate Accounts for 13% of Nigeria’s GDP — Report
Nigeria’s real estate sector contributed 13.10 per cent to real Gross Domestic Product (GDP) in Q1 2026, while the construction sector grew by 6.38 per cent year-on-year, according to Knight Frank’s H1 2026 Lagos Market Update released on Monday.
The report said the property market’s performance is being driven by rising residential rents, sustained infrastructure investment, and more selective demand from occupiers across Lagos, Abuja and Port Harcourt.
The wider economy shows signs of stabilisation, with headline inflation easing to 15.91 per cent in June 2026 from 25.29 per cent a year earlier. Knight Frank noted, however, that high development costs and affordability constraints continue to influence investment decisions and occupier strategies.
In Lagos, strong sector contribution comes amid an acute shortage of formal housing, pushing rents sharply higher. Prime areas such as Ikoyi, Victoria Island, Banana Island and Lekki Phase 1 have seen rents more than double since 2023, forcing many tenants to shift demand toward more affordable options on the mainland, including studios, mini-flats and two-bedroom apartments.
Transport infrastructure, including rail expansions and upgrades along the Lekki-Epe corridor, is extending the property footprint to emerging suburban locations such as Ajah, Sangotedo and Ibeju-Lekki.
Commercial property performance remains selective. In Lagos, Grade A office rents have stabilised at about $55 per square metre monthly, with landlords offering fit-out contributions, concessions and flexible leases to retain tenants. Industrial Grade A space in Alaro City and the Lagos Free Zone is leasing at $4 to $6.5 per square metre monthly, while retail demand is skewed toward convenience and neighbourhood shopping formats.
In Abuja, districts such as Guzape I and II recorded capital value growth of 20 to 30 per cent. Saturated prime zones like Maitama, Asokoro and Wuse 2 are seeing urban regeneration driven by diaspora investment and demand for modern offices, which pushed commercial rents up by over 10 per cent in H1.
In Port Harcourt, the oil and gas sector continues to underpin demand for modern housing, commercial hubs and industrial facilities, while older commercial assets face pressure to refurbish.
Commenting on the findings, Senior Partner and CEO of Knight Frank Nigeria, Frank Okosun, said: “The market is showing resilience, but performance is increasingly location- and asset-specific. Infrastructure can unlock new opportunities, yet investors and developers must also respond to affordability pressures, operating costs and clearly demonstrated demand.”
Lead Research Analyst, Daniel Fabi, added: “Across the three cities, occupiers are prioritising value and functionality. Quality offices and well-located industrial assets remain relevant, while residential demand is splitting between prime properties and more affordable options.”
Head of Marketing and Corporate Communications, Lanre Sonubi, said the report provides evidence-led insights to help market participants assess risk and position for growth.
