This follows the expiration of ultimatum issued property owners who built their houses under high tension line to vacate.

The removal began with the demolition of illegal row of shops situated directly under high tension lines at Isheri in Egbe-Idimu Local Council Development Area, LCDA, of the State at around 10.00am on Tuesday.

The demolition was supervised by the Ministry of Physical Planning and Urban Development, Lagos State Building Control Agency, LASBCA and the State Environmental and Special Offences Unit, (Task Force).

Commissioner for Physical Planning and Urban Development, Anifowoshe Abiola, who expressed government’s determination to rid the State off illegal developments said: “This is just another effort to maintain a sustainable, organized, liveable and friendly environment. The State Government has established zero tolerance for all structures and properties built under high tension cables across the State.

“Having residential buildings or conducting business under high tension power lines constitutes a danger to lives and properties that could have fatal consequences. The State Government, through its relevant ministries and agencies will henceforth, enforce applicable law strictly by removing all development and activities encroaching on the right of way of utilities and services.”

Anifowoshe, however, called on those who had structures within the right of way of public utilities to start removing them now or face the full consequences of the law.

He described the exercise as on-going, saying: “illegal developments within the right of way of high tension lines in other parts of the State will be removed.”

Acting General Manager, LASBCA, Oladotun Lasoju, said the Lagos State Urban and Regional Planning and Development Law 2010, not only prohibited building under the centre-line of over-head electricity wires, but also in very clear terms specified the distance to be observed between a property and a public utility such as high tension cables.

“Having served the statutory contravention notices on the offending structures and when owners of such structures failed to remove them within the statutory notice period, we are compelled to remove such structure at a cost to be borne by the owners,” he said.

The Chairman of the Lagos State Task Force, SP Olayinka Egbeyemi said 350 structures were demolished, warning residents and traders to desist from living and trading under high tension, adding that those affected were served adequate statutory notices before the demolition exercise.

According to him, residents and traders were allowed to remove their goods and properties before the demolition.

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Foreigners can obtain leases from the State for a maximum of 99 years for the use of land.

Nigeria condominiums for saleThe Land Use Act of 1978 converted all land to State Land. The Governor of the State is responsible for the management of this land on behalf of the people. Therefore, land cannot be owned privately. The Governor’s consent is needed for the assignment of title to use, occupy, and improve property with a statutory certificate. This certificate does not include rights to sell, give, or sub-let, which requires further consent from the State Governor.

A peculiarity about purchase of property in Nigeria, particularly in Lagos, is the Consent Fee. The logic is that the state government is the owner of land and therefore any change in ownership or assignment, in case of a lease, should have the consent of the Governor.

There is also a Capital Gains Tax levied at 10% of the difference between the sale price and the original acquisition tax. This is assessed by the Ministry of Finance.

Nigeria real estate for saleBefore purchasing, it is important to make sure that consent from the Governor is obtained for the sale. No land can be “sold” without this consent.

Sale of real estate, however, does not involve actual selling and purchasing. There is only the transfer of rights from one person to another. This transaction is usually called an ‘assignment’. The seller assigns the rights to use and occupy the land to the buyer. After the transaction, the buyer applies for a new (statutory) certificate under his name. In this case, the seller acts as the assigner, and the buyer is the assignee.

The buyer/assignee’s lawyer checks the title and other documents presented by the seller/assigner before continuing with the transaction. It is better to be safe, since there are several restrictions and conditions that come with a title, and the buyer has to make sure of what s/he is getting. There are even instances where the assigner is selling land that s/he does not own.

Purchasing property in Nigeria is not without risks – expropriation and others. Two laws make land ownership uncertain in Nigeria. Although these laws have their counterpart in most countries, it is the implementation that really matters. The Petroleum Act of 1969 and Land Use Act of 1978 allow the government to take over land under the state’s right to eminent domain. The compensation scheme covers only the “unexhausted improvements” to the land but not the land itself. The value is also fixed to a government rate which was set in the year the law was created. These factors combined with corruption and years of autocratic rule, mean that uncompensated expropriation of property is common.

Nigeria properties for saleAnother problem is the cadastral situation of the country. The country still has border disputes with Cameroon in the South. The field tracing and provisional demarcation of interstate borders between the 36 states is not yet finished. The last time that a topographical map of the country was made was in 1957 and it was at a scale of 1 : 250,000 [practically useless for individual property owners]. There is program to bring the scale down to 1 : 50,000.

Nevertheless, taking money out of the country should not be a worry for foreigners. According to the Nigerian Investment Promotion Commission (NIPC) Act No. 16 of 1995, foreign investors are guaranteed unconditional transferability of their dividends, profits and loan repayments.

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Apart from high demand and low supply, there are other factors responsible for this high rent and, according to Edward Akinlade, Group MD,  Suru Group Limited—a property investment and development firm—the Lagos Tenancy Law and multiple taxation are driving up house rents in Lagos.

Recognising that Lagos is home to over 21 million people, with housing posing a major challenge to the huge population, the state government in August 2011 enacted the Tenancy Law which prescribes one year rent for a new tenant and six months for a sitting tenant.

Akinlade explained to BusinessDay that the single year rent payment law has discouraged investment in homes for rent and has pushed rent to new level, adding that, presently, landlords collect two years’ rent for one year in many locations in Lagos.

He explained further that developers, through multiple taxation, were made to pay for land, planning and approval, environment, council, taxes and  Omoonile, stressing that the popular saying is that “even Fashola pays Omoonile”.

“Access to land through government allocation is a battleground for money bags in Lagos. Planning approval takes forever, yet the government says it will take one to two months, “not on your nelly baby oze”, he said.

Akinlade is not also comfortable with Federal Government’s housing policies, noting that access to credit from banks was near-impossible for developers and “if you are lucky to receive loan offers, you must find over 150 percent security for the bank to hold; 25 percent interest rate on bank loans is a killer for any developer’s business plan”.

He listed other reasons for the high rent to include sale of Federal Government’s land in Lagos, high exchange rate to import building material, highly priced local building material, high fuel costs showing itself through transportation costs and generators,  high labour costs, and inadequate design to maximise land space.

Akinlade pointed out that Lagos has seen 30 years of mass housing gap, explaining that since after Lateef Jakande whole governed Lagos from 1979 to 1983, there has been no mass housing for rent.

“Jakande was the last governor of the state that successfully implemented and delivered mass housing policies for rent.  For 30 years, successive governments ignored this need of Lagos residents. Jakande also commissioned a report on homes shortage in Nigeria, as at 2010, estimated at 16 million and projected to reach 20 million by 2020”, he recalled.

Historically, Akinlade also recalled that demand for housing for rent started when the Aworis admitted the visiting Prince Ado and his cohorts from the Benin Kingdom into their fold and the group’s final settlement in Eko with the assistance of some Benin chiefs which include Eletu Odibo, Obanikoro and others, resulting in market activities and gathering of traders needing homes to rent in modern day Eko.

CHUKA UROKO

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The most expensive real estate in Africa is in Angola’s capital, Luanda, according to a report released by the global property consultancy, Knight Frank. Prime office space there will set you back about $150 (R1 775) per square metre a month.

It’s one of the most expensive office rents in the world, according to Knight Frank’s Africa Report 2015. The high prices are driven by demand in the oil and gas sector and an extremely limited supply of stock, the company said in a press release.

Oil seems to be the common denominator for cities at the most expensive end of the list of 35 African cities compiled by the company.

For example, office space in Nigeria’s two major cities, Lagos and Abuja, come in at second and third most expensive on the continent. But even at $85 and $60 a square metre, it’s still significantly less expensive there than in Luanda.

Tied for fourth on the list are the capitals of Equatorial Guinea (Malabo), Gabon (Libreville) and Chad (N’Djamena), at $40 a square metre. The key export for these countries is petroleum.

Office space in Johannesburg seems cheap at the price of $22 a square metre. There is more prime office space available in South Africa’s commercial hub which drives down the price. “Office vacancy rates drifted upwards in many key South African markets during 2014, as a result of continuing development activity and moderate demand for space,” said the report.

Gabon, on the other hand, has had an undersupply of office space and companies have had to adapt residential properties or hotels. “There is a strong demand for the relatively small supply of good quality buildings,” states the report.

Even Maputo, at $37.50 a square metre, is more expensive than Johannesburg. Maputo is a relatively new entrant in the oil and gas sector.

Two of the cheapest cities on the list to rent office space are Malawi’s Blantyre and Zimbabwe’s Harare.

Office uptake in Harare is poor because of the country’s weakening economy, the report states. Void rates are in excess of 30% and space in new office parks remains largely unlet.

Residential property
It’s not just Luanda’s prime office space that’s among the most expensive in world, its residential property rentals are right up there as well. A four-bedroom executive flat is likely to cost between $15 000 and $25 000 a month. At the current exchange rate that’s R177 500 to R296 000 a month.

Johannesburg and Cape Town are cheap in comparison, at $4 500 (R53 000) and $5 000 (R59 000) a month respectively for an executive home with four bedrooms. In fact, it is more expensive to rent an executive home in Kinshasa ($8 000), Addis Ababa ($6 000) and Maputo ($6 000 a month) than it is in Cape Town.

Residential property in the oil-producing countries are again the highest, with Abuja at $8 500 and Lagos, Malabo and Libreville at $8 000 a month.

Gaborone, Harare and Blantyre have the cheapest rental rates for executive-level homes listed in the Africa Report. In Gaborone you’ll get a four-bedroom home for $2 180 a month and in Harare and Blantyre you’ll pay $1 500.

Urban growth
Africa’s cities are among the most rapidly growing in the world, according to the United Nations. Last year, about 60% of the continent’s population was rural but, by 2050, about 56% will probably live in urban areas.

South Africa is ahead of the curve in Africa: by 2012, 62% of the population was urban. There was a 50/50 urban/rural split in Nigeria in 2012, according to World Bank development indicators cited in Good Governance Africa’s Africa Survey 2014.

Nigeria is one of just three countries – the other two are India and China – that together are expected to account for nearly 40% of the projected growth of the world’s urban population between 2014 and 2050. India is projected to add 404-million urban dwellers, China 292-million and Nigeria 212-million, according to the UN World Urbanisation Prospects 2014 report.

Cairo, Kinshasa and Lagos were the only megacities in Africa in 2014, but three more are expected to emerge by 2030, according to the UN report. They are Dar es Salaam in Tanzania, Johannesburg and Luanda.

By 2025, the populations of Kampala (Uganda) and Lusaka (Zambia) are expected to double.

The number of African cities with populations between five million and 10-million is also expected to increase, from three in 2014 to 12 in 2030, the UN report states.

These demographic and economic growth prospects in Africa are attracting increasing numbers of international investors investigating opportunities in African real estate markets, according to Knight Frank.

“Large volumes of good quality commercial and residential property are needed to support the continuing African growth story,” said Francois Staples, joint chief executive and co-founder of Galetti Knight Frank, the company’s South African branch.

Shopping malls are a relatively new concept in much of Africa, but a spate of new malls has developed in cities such as Accra and Nairobi. South Africa is by far the most mature retail market in Africa and continues to see significant development, said the company.

“While many African countries remain challenging … to do business, there are high-growth opportunities across Africa for those able to those able to navigate their way through the markets,” said Staples.

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