Sanni Faruq on Long Leases Transforming Lagos Real Estate

Long leases are becoming increasingly popular in Lagos as a response to rising property prices and construction costs, which have made outright homeownership unaffordable for many. Sanni Faruq, Lead Consultant at Senior Homes and Properties, stated that demand for long leases in high-demand areas like Yaba, Shomolu, Maryland, Ikeja, and Surulere has surged over the past year.

This demand is influenced by hyperinflation and escalating construction costs, which have pushed homeownership prices beyond the reach of many middle-class professionals and mid-tier investors. Long leases can lower the entry barrier by 60% to 70% compared to outright purchases.

Additionally, traditional tenants are opting for long leases to avoid unpredictable rent hikes, while smart investors are leveraging these arrangements for better cash flow. Faruq noted a shift in how clients use long-lease properties, with many now utilizing them as hybrid income sources, including short-let operations and generating rental income while maintaining personal use.