Nigeria's property market is becoming increasingly divided between premium properties and affordable housing, according to Knight Frank's first-half 2026 report on Lagos, Abuja and Port Harcourt. The construction sector grew 6.38 percent year-on-year in the first quarter of 2026, while real estate contributed 13.10 percent of real GDP. Headline inflation eased to 15.91 percent in June from 25.29 percent a year earlier, yet affordability remains a significant constraint for investors, landlords and occupiers across the market.
In Lagos, residential rents have soared in prime locations including Ikoyi, Victoria Island, Banana Island and Lekki Phase 1, with some rents more than doubling since 2023. The squeeze on affordability is driving demand toward cheaper studios, mini-flats and two-bedroom homes on the Mainland. Infrastructure projects including rail network expansion and improvements along the Lekki-Epe corridor are creating new opportunities in growth areas such as Ajah, Sangotedo and Ibeju-Lekki. The commercial property market shows more selectivity, with Grade A office rents stabilising at about US$55 per square metre monthly as landlords increasingly offer fit-out contributions, concessions and flexible lease terms. Industrial Grade A rents in Alaro City and Lagos Free Zone range from US$4 to US$6.5 per square metre monthly, while retail demand is shifting toward convenience-led and neighbourhood shopping formats.
In Abuja, property values are rising in selected districts, with Guzape I and II recording reported increases of 20 to 30 percent. Prime areas such as Maitama, Asokoro and Wuse 2 face saturation, prompting regeneration and new supply. Commercial rents increased by more than 10 percent in the first half of 2026, driven by demand for quality office space and flexible work environments. Diaspora investment remains an important driver, though affordability concerns persist. Port Harcourt's market continues to be supported by the oil and gas sector, with residential demand concentrated in established neighbourhoods such as Old GRA and GRA Phases 1-3, alongside mid-market locations including Rumuodara and Ada George. Office tenants increasingly prioritise reliable power, lifts, parking, security and professional facilities management.
Frank Okosun, Senior Partner and Chief Executive Officer of Knight Frank Nigeria, 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." Daniel Fabi, Lead Research Analyst, noted that "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."