Further to the steady growth of the Nigerian real estate market, It seems the potentials may become the new oil rig for the country. The real estate sector is beginning to see dedicated capital being raised towards investments. International Private Equity firms and fund managers –Most of them with an emerging market focus, having invested in other such markets as india and china – are slowly beginning to seek real estate Investments in Nigeria. Below are few amongst the prominent firms who have identified the said to be “New Oil Rig” (Nigerian Real Estate) and are already taping into it.

The first of these is ACTIS CAPITAL, a private equity firm headquartered in London with offices now in South Africa and Lagos. The firm has raised up to $6.8billion in funds and has about 120 investments professionals. Actis was responsible for a $40million deal for the development of Palms shopping mall which was a joint venture outsourced to Nigerian local developer Mr Tayo Amusan.

Emerging Capital Partners/Lionstone Group is another one of such prominent firms which has offices in six locations across Africa including Nigeria. ECP has the largest private equity presence on the African continent, having raised more than $1.5billion for investment in African companies. The company is currently raising a $350million real estate fund – the West Africa Real Estate (WARE) fund – in joint venture with Lionstone Company Limited, an Investment and advisory group based in Lagos, Nigeria. The fund is seeking to provide returns averaging 20-25%, net of management fees and operating expenses.

Looking at such investment moves by these companies to mention a few, it is clear that real estate in Nigeria is fast growing, although the industry is still underdeveloped with very limited and in some cases non-existent institutional quality product. However the continued interest of investors in the region, spurred by current real estate fundamental and positive macro-economic outlook clearly points to the growth in the Nigerian real estate market.

Overall, the potentials of this industry if it is properly maximized and well tapped into at all levels can possibly deliver a turn over as buoyant as the Oil  industry delivers.

Written by Tunji Akande, Associate at 3Invest