REAL ESTATE NEWS

Series 1: Understanding Locations And Solving Residential Property Needs: The High Priority of Yaba and Surulere Axis

INTRODUCTION

This article attempts to enlighten and educate home seekers, prospective tenants, real estate professionals, land owners and other real estate stakeholders on the nature of the property market. Also, it examines the current market rental prices and factors affecting property rental prices in Yaba and Surulere. Ultimately, it looks at how these decision makers mentioned above can strategically take efficient and effective real estate decisions in achieving the required maximum return which may be monetary or non-monetary.

PROPERTY MARKET OF YABA AND SURULERE

A market is an arrangement whereby buyers and sellers are brought into close contact for the purpose of transacting business. Therefore, a property market is an arrangement whereby landowners, agents, home seekers and other real estate professionals are brought into close contact for the singular purpose of satisfying the clients’ requirement of a home befitting of his income, social status and class.

To start with, property market anywhere in the world with no exception of Lagos is always an imperfect market because of many reasons; firstly due to the fact that majority of transactions are conducted privately. Even when results of transactions in the market are available, they would not necessarily be particularly helpful in the absence of detailed information on such matters as the extent and condition of buildings and the subsisting right of ownership. Also, each landed property is unique by virtue of its location. No two properties are the same even if they were built on same day and they both lie next to each other. For the mere fact that they were built on different parcels of land, they can never command the same value or price

The table below contains the major areas under the Yaba with the available and specified accommodation details under consideration and their current market rental prices. The prices are stated in yearly terms.Table  1.1

table1

So therefore, the areas in Yaba and Surulere axis have become one of the most sort-after and desired areas for many people in Lagos. This is majorly because they are centrally located in terms of geographical mapping and closeness to the sub-urban areas/rural urban fringes and the Lagos Island. It’s an area that can be easily accessed by road users coming from the Island and those moving to the island from the mainland. Therefore, those who have their offices on the Island and areas ‘outside’ the sub-urban areas/rural urban fringe will always want to reside in this axis for the sake of nearness or proximity to their place of work. This is as a result of the serious traffic congestion during closing hours, which an average Nigerian wants to avoid. The serenity and security of these areas especially for the well-planned estates and areas like Adaba Mews, Olarenwaju estates, Jacob Mews, Alagomeji, Alaka estate, Williams estate, Central areas of Surulere( Ogunlana drive, Akerele, Adelabu, Adeniran Ogunsanya, Bode thomas) just to mention a few have also added to the desire and high need for the these areas.

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All these have prompted landowners/Landlords requesting for two years rent in advance. In fact, some of them have reluctantly rejected any form of negotiation in favour of a year payment despite the Lagos state Laws on tenancy. This demand for two years rent payment in advance does not however correlate or compensate for some buildings which are old and structurally weak requiring immediate renovation/alteration/remodelling. In some cases, cosmetic architecture could be introduced if a building can be easily converted or adapted to suit other uses distinct from the initial use the building was built to serve. The reality is that these areas have many old houses and there has to be a consideration in rent payment where the prospective tenant will be undertaking these building works. Landlords and their representatives must be willing to negotiate rental price for their properties in circumstances where conditions of location, physical characteristics, condition of the building, and other factors are not right. So therefore, the areas in Yaba and Surulere axis have become one of the most sort-after and desired areas for many people in Lagos. This is majorly because they are centrally located in terms of geographical mapping and closeness to the sub-urban areas/rural urban fringes and the Lagos Island. It’s an area that can be easily accessed by road users coming from the Island and those moving to the island from the mainland. Therefore, those who have their offices on the Island and areas ‘outside’ the sub-urban areas/rural urban fringe will always want to reside in this axis for the sake of nearness or proximity to their place of work. This is as a result of the serious traffic congestion during closing hours, which an average Nigerian wants to avoid. The serenity and security of these areas especially for the well-planned estates and areas like Adaba Mews, Olarenwaju estates, Jacob Mews, Alagomeji, Alaka estate, Williams estate, Central areas of Surulere( Ogunlana drive, Akerele, Adelabu, Adeniran Ogunsanya, Bode thomas) just to mention a few have also added to the desire and high need for the these areas.

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The table below contains the major areas under the Surulere Axis with the available and specified accommodation details under consideration and their current market rental prices. The prices are stated in yearly terms.Table  1.2

table2

Role of ToLet.com.ng in Rental Price determination

Some rental home seekers have the belief that Tolet.com.ng should reduce prices of property listed on the website in order to enable them realise the dream of paying for their desirous house. This has indeed an erroneous belief the company either solely fixes prices of properties or is partly responsible for the rental prices displayed online. This is however untrue. The prices displayed online are those fixed or determined by Landlords, or by principal agent of properties who have been authorized or commissioned by the former.

The question is what indeed is the role of ToLet.com.ng in helping individuals secure their desired rental home without undue financial strain? It’s important to state here that the company also negotiates on behalf of the client. It is indeed good to maintain a healthy balance of negotiating on behalf of a client which results in a win-win situation. A good relationship is better than any transaction.

Besides this, there have been issues raised on the demand for additional fees added to the total rent of the property. This has been a thing of concern to Tolet.com.ng in cases where two years agency and legal fees is requested. There are situations in which the company had to negotiate in favour of a year or a year and half additional fees despite two years rent payment in order to accommodate the clients’ budget and allow the transaction go through. It’s not all about making profit but helping clients secure houses without undue financial strain.

Factors affecting rental value in the Yaba-Surulere Axis

One of the factors determining the rent of a property is Location. Accessibility is very important in determining the value of any property. Home seekers must understand that you have to pay more for properties which are centrally located or easily accessible. For instance, a 3-bedroom flat off Alhaji Marsha road and other central areas cannot command the same rental price as a 3-bedroom flat at a farther area of  Surulere (Aguda, Ijesha or Itire-Ikate). The rental value of a 3-bedroom in a serene area of Alagomeji, Yaba cannot be the same as a 3-bedroom in Akoka. Rental values of Onike and Iwaya in Yaba are very similar especially as regards 2 and 3-bedroom flat

In addition, the physical characteristics of a building in terms of its structure and finish go a long way in determining rental value, so also is the internal and external finish. The preference for Marble and ceramic tiles over terrazzo floors, the use of POP ceiling rather than asbestos ceiling, and the use of aluminium glazed casement/sliding windows over the more conventional Louvre blades just to mention a few.

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The condition or state of a building will also affect the rental value. The degree of renovation and repairs of building elements and components such as floors, walls, openings, roofs and others will determine how much a property is worth. Landlords, agents and home seekers must take all these into consideration before paying for an accommodation,  and not only concentrate on location. It has been observed from recent negotiations and transactions that Landlords and their agents are always particular about location value at the detriment of the state of the building and the environment. Other factors may also include Market demand and supply and rise in real estate investors to build and re-build amongst others.

All these factors must be aggregated together in fixing the rent which will not only reflect the current market price but the agreed amount to be expended on renovation if any.  For instance, a 3-bedroom flat of a block of four flats on Eric Moore in Surulere for residential use only was put in the market for N 1,200,000 per annum. The flat only had a toilet and a bath with a terrazzo floor and Louvre blade window requiring very little renovation like re-painting and changing of wardrobes. The building is old and the external outlook does not excite any potential home-seeker and to make matters more astonishing, the landlord wanted two-years rent paid. This shows that the rent was only determined by location. The rigidity in payment procedure makes it sometimes difficult for home-seekers to consider such houses because they are way above budget.

Conclusion

No doubt, the number of residential rental home seekers is on the rise as demand greatly outstrips supply in the Yaba-Surulere axis. This has partly been responsible for the high rent demanded from home seekers because of the intensity of competition for available spaces. This is why landowners have taken advantage of the panic-situation for houses to demand for rent above the market-price.

 

Tella Oluwakorede

 

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