Real Estate Investment Opportunities In Calabar
For the past eight years, Cross River State has embarked upon massive urban renewal programme. The idea behind this programme is not far fetched. It is because urban renewal is tied to tourism. The scheme has been so comprehensive that Calabar in particular has been acclaimed by all and sundry as the cleanest and best environmentally managed city in Nigeria.
What formed the basis for the renewal from the outset was the review of Calabar Master Plan which led to the development of the Akpabuyo Satellite Town.
Development Of A Satellite Town
This initiative of Cross River State government to create a new satellite town is aimed at decongesting the city of Calabar. Akpabuyo Satellite Town is a new suburb which is located on the fringes of Calabar. As it stands presently, Calabar urban lacks reasonable expanse of land to support large-scale housing development. The new town is about 15 minutes drive from Calabar. The site covers about 400 hectares and contains about 3,500 residential plots. Already, the state government is developing the new Housing Estate there at Ikot Offiong Ambai and foreign companies such as Orascom are expanding into the area. There is ample opportunity for private investment here.
The state government further intends to build a multi-billion naira ultra modern market in Akpabuyo in order to decongest the markets within Calabar South and Calabar Municipality and to enhance Calabar metropolitan urban development.
Cross River State Housing Policy
Under this policy, Government acts as a facilitator by providing infrastructural facilities in all sites acquired for housing development as a means of encouraging private sector participation. Therefore State’s housing policy is private sector driven. In other words the Government does not embark on direct housing development, but merely provides site and services for developers.
The Impact of Tourism on Real Estate in Calabar
Investigations carried out in some of the leading hotels in Calabar show that, they are experiencing increased volume of business; hotel occupancy rates range between 80% to 90% on week days and sometimes 100% on weekends.
The volume of air traffic has also increased tremendously. About three airlines, namely Arik, Aero Contractors and Virgin Nigeria, have more than three schedule flights each to Calabar daily. The managements of substandard hotels have upgraded them to internationally acceptable standards.
The real estate sector is also reaping tremendously from the effect of tourism, a 3-bedroom flat that was going for ₦80,000.00 – ₦100,000.00 per annum now goes for ₦300,000.00 – ₦500,000.00 depending on the location and facilities provided. The rental upsurge for a detached house is unprecedented; the range is between ₦1.5m as against ₦500,000.00 to ₦800,000.00 obtained three years ago.
Rental Value Appreciation Due to Effect of Tourism/UrbanRenewal.
|S/N||Property Type||Location||2005 (₦)||2006 (₦)||2007 (₦)|
|1.||3-BR Flat||State Housing||80,000||200,000||300,000|
|2.||3-BR Detached Bungalow||State Housing||100,000||120,000||350,000|
|3.||4-BR Detached||State Housing||250,000||300,000||500,000|
|4.||4-BR Detached House||State Housing||500,000||600,000||1,500,000|
Land Value Appreciation Due to Effect of Tourism/Urban Renewal
|S/N||Location||Land Size (m²)||2005 (₦)||2006 (₦)||2007 (₦)|
How To Become A Property Investor In Calabar
(a) Who is an Investor?
Any purchaser or developer of landed property can be regarded as an investor. Hence, there are three types of investors in landed property.
- One who owns and uses landed property – Owner–Occupier.
- One who owns and does not use landed property – Landlord.
- One who uses and does not own landed property – Tenant.
In the first case, the one who builds or purchases for occupation is also an investor because the benefit in this circumstance, is the annual value of the occupation.
From a general standpoint, therefore, an investor is a person who is prepared to tie up a certain amount of capital in land or land and buildings with a view to enjoying some benefits – commercial or social – derivable from the occupation, or one who regards his property as an investment capable of yielding annual return by way of rent, or one who buys at one price now, and in the hope that he may sell at a higher price at some time in future.
(b) Method of Acquisition:
(i) Tinapa: For lease of facilities/accommodation contact Tinapa management located within the resort.
(ii) Free Trade Zone: Contact the General Manager for details on leasing of land or warehouses.
(iii) Government’s (Site and Services) land: Apply to the Director of Lands, Ministry of Lands and Housing, Cross River State, for issuance of application form. Therefore, allocation will be made to the applicant upon payment of statutory and infrastructural fees
(iv) By Private Owners: Purchases are usually by private treaty. For this category of owners a prospective investor is advised to seek the services of practising estate surveyors and valuers in Calabar. There are about 12 registered firms in Calabar.
(c) Returns on Investment
Investment in landed property is always considered worthwhile because it is always a hedge against inflation. As the value appreciates with time so do the corresponding returns. In the case of Calabar, property is an ‘all-sellers’ market (i.e many more buyers’ than sellers) rather than buyers’ market. It is difficult to pinpoint returns accruing to investors because of the uniqueness of landed property.
Unlike ordinary commodities, the market for landed property is imperfect. During the period of business boom as we are experiencing now, the returns can be highly rewarding. Although the monetization policies of State and Federal Governments have injected more residential properties into the market, this phenomenon does not seem to have any serious effect or the capital value of landed properties as their demand still far outstrips their supply. Besides, most of the government monetized properties are substandard, and therefore, do not meet the qualitative demand of most investors.
Source: Oka Bassey Ipia & Co (Estate Surveyors and Valuers)