The rising expenditure on travel, tourism and travellers’ inclination toward budget-friendly accommodations is driving growth and high demand for short-let apartments in Nigerian cities.Short-let apartments are properties considered as alternatives to hotels, which can be let out from weeks to a few months and even a year depending on demand. Such offerings could range from studio apartments to bedrooms, duplexes and bungalows.

The businesses have continued to enjoy an estimated 200 per cent growth as daily demand increases compared to the residential and hospitality markets. The attraction to the sector hinges on comfort, aesthetics and offering of luxury facilities.

In meeting customers’ needs, apartments tend to be larger than standard hotel rooms with kitchen, as well as facilities like internet, 24-hours light and water, air conditioning, security, fully furnished, access to Digital Satellite Television (DSTV), Closed Circuit Television for security, parking spaces, washer and dryer.

The global short-let rental market size is valued at $99.38 billion as of 2021, which is expected to grow at a Compound Yearly Growth Rate (CAGR) of 11.1 per cent till 2030; the increase in short-let apartments’ adoption is attributable to strong income profile and ease of access to investors, operators and tenants.

Short-let apartments in Nigeria leveraged the Covid-19 lockdown, a period when most hotels were out of business and were forced to close their doors to occupants, to record breakthroughs.

There has been increasing ongoing development of short-let properties in Abuja, Port Harcourt, Ibadan, Lagos and other locations. Specifically, in Lagos, there are over 2,000 short-let projects championed by various developers.

According to Pan-African real estate data firm, EstateIntel, the Lagos short-let market has grown by 263 per cent over the past three years. In a report obtained entitled: ‘Boom or Bust? Lagos Short-let Market’, they said the growth was mainly driven by rising demand for long and short stay in apartments.

Other reasons adduced for its performance are that short-let serves as alternative to ‘typical’ tenants, strong income profile for investors, patronage by younger demographic with short-let emerging as a cheaper alternative to hotels and the ‘diaspora’ effect. The eminence of the short-let market is a deeply embedded trend to the Lagos residential market. The emergence of this niche is essentially a backward correction of the market that is not accustomed to monthly rentals. The low barriers to entry for people to furnish and deliver apartments to the public on a daily and monthly basis brought out pent up demand that was underserved by a rigid yearly rental payment market.

There have not been an option with such flexibility before. Rising demand in the short-let space has been matched by an increase in supply in the market. Generally, the short-let segment has emerged as a strong performer.”

It further said Nigerians in diaspora have been a key driver of the seasonal nature of short-let demand that has seen occupancy levels peak during major holidays and record lower levels in off peak seasons such as between March and July.

Research and Insights lead at EstateIntel, Tilda Mwai, said: “The sheer amount of interest we have seen in the space over the past year points to a potential market saturation. Even though we are confident in the opportunities the short-let market has to offer, we’d encourage new players looking to enter to take time and ensure that their projects are differentiated or can remain competitive in a high supply environment.” Findings show that Ikoyi, Victoria Island, Lekki Phase 1 and Ikeja have emerged as the top short-let hubs in Lagos, while Lekki Phase 1 has emerged as a stand out performer, maintaining considerably higher occupancy levels at 80 per cent compared to 60 per cent and 70 per cent recorded in Ikoyi and Victoria Island. The demand for short-let rentals declined in 2020 due to the COVID-19 pandemic. According to the statistics published by World Tourism Organisation (UNWTO), the COVID-19 pandemic caused a 71 per cent decline in tourist arrivals in 2021 and 72 per cent in 2020, compared to 2019 representing a loss of 2.1 billion international arrivals in both years. According to Market View Research report, increased demand for international travel in emerging markets followed by low airfare prices across the globe will boost the industry growth. In addition, key players are listing a variety of short rental stays, such as private homes, villas, beach houses, and apartments to attract millennials and travellers looking for aesthetic outlets.

This is expected to boost the real estate industry’s development, thereby supporting market growth. Besides, consumers’ knowledge of services and offerings is growing as a result of the internet and social media. Special services, exotic places, and amenities are being offered, specifically for female visitors, by key firms to capture a higher market share.

Essentially, there is a boom in the short-let business, as prices are becoming competitive. One-bedroom in Lekki Phase I ranges between N35, 000 to N45, 000 per day and longer stay attracts discounts. Price for a two bedroom can range between N50, 000 to N60, 000. In the mainland it is the same rate but it depends on locations.

In Owerri, Imo State, three bedroom deluxe apartment goes for N70, 000, while luxury three bedroom apartment and five bedroom are rented at N85, 000 per day and N165,000 respectively.

Speaking on the phenomenon, the Managing Director, Mausi Realty Lagos, Mausi Bababunmi, said the boom is real as about 90 per cent of clients are young and mobile entrepreneurs. He noted that the business is lucrative and thrives in mainland and Island areas in Lagos.

Mausi, who operates short-lets in Lekki and Omole, said the growth rate is about 200 per cent, adding that with a good capital base and investment, clients are always available for patronage.

He said: “If you are paid a yearly rent, within six months, you can recoup the return on investment. As an operator, I wanted short-let accommodation for my mother in Omole. I discovered that people, who spend between two-to-three months took 95 per cent of the vacancies.

However, he said there are challenges to the business. This, he said, includes the cost of providing power, security, theft of facilities and unfortunate circumstances like death of customers.

Mausi, who described investment in short-let accommodations as a means of meeting the needs of the people, said the government could support young entrepreneurs investing in the sector with grants/loans to cushion the effect of shortage of housing in the country. Government, he said, can also partner with some of the operators to expand their businesses.

The Managing Director, Starlight Homes, operator of short-let apartments in Port Harcourt, Akudo Okpo, said short-let apartments are now a trend in the real estate market due to its unique features.

She said it offers people more comfort than hotels because it is like living in a home, where you can have access to kitchen to cook your own meal, a big parlour, dinning, host business meetings in your space and more space to operate.

Okpo said although the price could be high especially, for apartments located in strategic locations. However, occupancy rate can be as high as 45 per cent in locations like Port Harcourt, for those who want luxury or comfort.

She said: “People have started embracing the short-let apartments, especially, oil company workers, people that return from abroad and high profile individuals. “Companies hire the apartments for them. Every other person would like to go to a hotel. Sometimes, a room can be as high as N35, 000 or N50, 000 per day, depending on how spacious, or the area, where it is situated.”

In Port Harcourt, the challenges to operators, Okpo said, is low patronage due to the current poor economy and lack of electricity as most of the operators run generators 24-hours. “Except for those you can afford alternate energy sources like solar. It is regrettable that the government rarely offers support for businesses in this part of the world. Government should provide the enabling environment for businesses; ensure security of life and property.

“I think partnership among operators is better for those who plan to invest in the sector. You need financiers and partners, who are interested in this kind of business. The return on investment is tangible because if you put the building in good condition, people will patronise it,” Okpo said.

Nola Adetola – Veritasi Homes Limited

Adetola Nola is the Founder and Chief Executive Officer of Veritasi Homes Limited. Nola is an excellent driven and innovative entrepreneur with positive energy and experience. He is instrumental in redefining success in growing businesses in Nigeria.

With over ten years of experience in real estate marketing and investment, he brings to the industry a plethora of expert knowledge and hands-on secured information and opportunities across various segments of real estate. Before Veritasi, Adetola founded and co-founded five other companies. Apart from Veritasi, he is also currently the Founder/Chief Strategy Officer of Nola Travels and majority shareholder at real estate development company, Eystone Development.His vision is to raise 200 successful African Entrepreneurs who will, in turn, create employment by 2025.

Adetola has been nominated and won numerous awards in recognition of his immense contributions to the Real Estate Industry. This includes, Forbes Africa 30 Under 30 Business class, 2019; Ecowas Youth Ambassador, 2020; Advance Media: 100 Most Influential Young Africans, 2020, amongst others.

Olawale Ayilara – Landwey

Olawale has over 10 years experience in business, handling transactions worth a combined value of $300 million. He is the CEO of Landwey Investments, a Real estate development company focused on making real estate investments accessible to all through a secure and reliable service. He also Co-founded Nigerian Property Investments Group, a real estate platform for Nigerians in diaspora.

Wale is a recipient of the 2018 Forbes Africa 30 under 30 recognition, He is an alumnus of Lagos Business School EDC with an MBA from the Metropolitan School of Business and Management, UK. He also received Harvard Executive Certification in Real Estate Management, Finance, Design and Leadership. He is still a current student at the Harvard Business School.He is the Group CEO of Oxygen Holdings, He sits on the board of over 10 high-profile businesses and is a member of the Sponsors for Young Growing Business Association, a pan-African organisation comprising a network of leading African professionals thriving in challenging career paths.

Sijibomi Ogundele – Sujimoto Construction

Sijibomi Ogundele is the CEO of Sujimoto Construction Limited; a trusted one-stop solution provider in Real Estate and Hospitality. He was born on the 8th of April 1981, into a corporately dynamic family where his Father worked 9-5 as a Manager and my Mother was a full-time Entrepreneur.

Mr. Ogundele, who built his company – Sujimoto Group, in a few years into a Luxury Construction powerhouse in Africa, focused on building extraordinary luxury edifices in premium neighbourhoods across Africa.

Sijibomi is very unapologetic about his opinions concerning the luxury real estate industry and has been described severally as the Donald Trump of Nigeria; claiming that the Nigerian Luxury Real Estate industry has not achieved 5% of its true potential. This inspired his vision to set up his company called Sujimoto Construction Ltd, which has achieved impressive strides within a few years of operations and gained recognition for being one of the most dynamic luxury real estate and construction companies in Nigeria as recorded by Channels Television, CNBC to name a few.

Dr. Tony Aspire Kolawole– President of BRG

Tony Aspire is the president of the Billionaire Realtors Group (BRG) a leading real estate brokerage firm in Africa that boasts of a team of over 20,000 realtors. He is also the managing director of Tribitat Homes.

Tony is a seasoned and highly recognized real estate entrepreneur with key interests in real estate marketing, commercial real estate, real estate advisory and strategy as well as property development and investment.

He is deeply skilled in small business strategy, sales and negotiations, and digital strategy for business. He also possesses excellent team-building skills.

Noah Ibrahim – Novarick Homes and Properties Limited

Noah Ibrahim is a young, innovative entrepreneur and Real Estate professional who is in his thirties. Noah Ibrahim is the Managing Director & CEO of Novarick Homes and Properties Limited. He has been an entrepreneur since he was an undergraduate student. After graduating from Obafemi Awolowo University in Mechanical Engineering, Noah later ventured into footwear design and production with a friend.

He also founded Sellerrand Realty Limited a property sales and facility management company before founding Novarick Homes & Properties Ltd, a fast-growing Real Estate development company championing the emergence for the development of a smarter and greener community by leveraging renewable energy as an alternative source of power.

Kehinde Muibi – MKH Investments

Kehinde Muibi is the CEO of MKH Investments, a real estate development company driven by its goal of creating sustainable real estate opportunities in Nigeria.

He is also the CEO of Destiny Crest Limited, a construction company borne out of his passion for construction.With a humble beginning, Kehinde has risen to be one of the young successful CEOs thriving and making a difference in the real estate sector. From earning N150 in a construction firm, he has built a real estate firm worth N10bn in assets.

Richard Nyong – Lekki Gardens Limited

Richard Nyong is the CEO of Lekki Gardens Estate Limited, one of the most popular Real Estate Companies in Nigeria. Nyong who is a product of Pastor Sam Adeyemi’s Daystar Leadership Academy, sits on the board of several blue chip companies.

With over a decade experience in the real estate sector, Nyong’s multibillion dollar Lekki Gardens Estate Limited, also consults, develops and manages prime property for a wide range of clientele.

Aside from the popular Lekki Gardens, the 41 year old entrepreneur who is also the brain behind Ikoyi Gardens, Mainland Gardens, Port Harcourt Gardens and Richards Court estates.

Last year, Dr. Richard Nyong, who was conferred with the Officer of the Order of the Niger (OON) for his huge contribution in making housing more affordable to Nigerians and creating over 250,000 jobs both directly and indirectly for Nigerians across the nation