Real Estate Contributes 13.10% to Nigeria’s GDP as Prime Lagos Rents Double Since 2023

Real estate contributed 13.10 per cent to Nigeria’s real Gross Domestic Product in the first half of 2026, according to Knight Frank Nigeria’s Lagos Market Update H1 2026. The report, released Monday, said lower inflation, a steadier naira and the Nigeria Tax Act 2025 reshaped demand across the Lagos, Abuja and Port Harcourt property markets.

Macro backdrop improves

Real GDP grew by 3.89 per cent in the first quarter. Construction expanded by 6.38 per cent. Headline inflation eased to 15.91 per cent in June from 25.29 per cent a year earlier. The naira held between N1,360 and N1,380 per dollar, while external reserves rose above $51 billion.

“The first half of 2026 was a period of consolidation. Inflation is well below its recent peaks, the naira has been more predictable and reserves are stronger, giving developers, investors and occupiers a firmer basis for planning. Real estate contributing more than 13 per cent of GDP confirms that property remains central to the country’s economic story,” said Frank Okosun, Senior Partner and CEO of Knight Frank Nigeria.

Lagos rents climb

In Lagos, rents in prime districts such as Ikoyi, Victoria Island, Banana Island and Lekki Phase 1 recorded the strongest growth. Rents in several locations have more than doubled since 2023. Annual rents for three-bedroom apartments now range from N22 million in Lekki Phase 1 to N45 million in Banana Island.

Under the Nigeria Tax Act 2025, residential sales and leases are exempt from Value Added Tax. Withholding tax on individual residential rents has also been removed. Prime office rents stabilised at about $55 per square metre per month. Landlords are offering rent-free periods rather than cuts.

“Prime residential rents keep climbing because supply remains structurally tight, while affordability is pushing Mainland developers towards smaller units. In the office market, landlords are competing through rent-free periods and fit-out contributions rather than headline cuts, which suggests the market may be approaching a pricing floor,” said Daniel Fabi, Lead Research Analyst.

Abuja and Port Harcourt

In Abuja, city-centre values continued to rise, driven by diaspora investment. Diaspora buyers account for 70 to 80 per cent of sales for some developers. Property values in Guzape I and II are rising by an estimated 20 to 30 per cent. Office rents grew by over 10 per cent as the NRS, ECOWAS and Africa Re buildings added new space.

Port Harcourt remained resilient, anchored by the oil and gas sector. Prime demand is concentrated in Old GRA, GRA Phases 1 to 3 and Peter Odili Road. The mid-market is stronger in Rumuodara, Rumukwurushi and Eliozu.

“Lagos is driven by tight supply and infrastructure, Abuja by diaspora capital and emerging districts, and Port Harcourt by the energy sector and a growing mid-market. Across all three, occupiers are placing a premium on quality, security and reliable utilities,” said Lanre Sonubi, Head of Marketing and Corporate Communications.

Knight Frank Nigeria is a member of Knight Frank LLP. The firm has served clients for over 128 years globally and 60 years in Nigeria. Headquartered in London, Knight Frank has more than 20,000 people operating from 384 offices across 51 territories. It advises individual owners and buyers, major developers, investors and corporate tenants.

For consumers and businesses, the tax changes remove VAT on residential sales and leases and withholding tax on individual residential rents. The naira’s stability between N1,360 and N1,380 per dollar and reserves above $51 billion gave property investors a firmer basis for planning, Okosun said.