Operators Eye New Rail Lines, Infrastructure Upgrades To Unlock Value In Underserved Real Estate Markets

Real estate developers and investors are increasingly targeting the construction of new rail lines and complementary infrastructure to revitalise underserved property markets, positioning them for exponential growth.

A real estate consultant, Adeola Akinpelu, said that transport and infrastructure upgrades by the Lagos State government will significantly elevate property values in neighbourhoods long considered underserved across the state.

Speaking with LEADERSHIP, Akinpelu noted that the expansion of highway networks, alongside the construction of the Blue and Red rail lines, will play a critical role in unlocking value across the Lagos real estate market.

Akinpelu, who heads Research at a leading Lagos-based real estate advisory firm, said the fundamentals of the Lagos property market remain strong despite prevailing economic pressures.

“Even with broader economic pressure, people still need places to live, work and play, and they’re willing to pay for quality,” he said.

He explained that for many years, the Lagos real estate investment narrative was dominated by traditional high-end corridors such as Ikoyi and Victoria Island.

However, he stressed that a new investment map is emerging as investors increasingly look beyond these historic hubs to areas such as Lekki Phase 2, Ibeju-Lekki, and Epe, where large-scale infrastructure projects are reshaping investment decisions.

“Connectivity unlocks real estate value in a way nothing else does,” Akinpelu said, adding that “areas once dismissed as remote suburbs are now firmly on the investment map.”

Regarding market challenges, the real estate advisor cited sharply rising construction costs, driven by high input prices and foreign exchange volatility. He further argued that inflation continues to erode purchasing power, squeezing developers’ margins while limiting affordability for prospective buyers.

Also speaking, a property strategist with an international investment firm operating in West Africa, Chukwuemeka Nwosu, said emerging real estate nodes are benefiting from catalytic developments such as the Lekki Free Trade Zone and the Dangote Refinery.

According to him, “Affordability at entry, combined with major infrastructure rollouts, creates a compelling long-term value proposition,” noting that “we’re seeing institutional capital test these markets for future capital appreciation.”

In the residential segment, the persistent imbalance between housing supply and demand, particularly within the affordable and mid-market categories, continues to provide a buffer for investors. Data from multiple brokerage firms indicate consistently high occupancy rates in serviced apartments and short-let properties, especially in locations hosting corporate tenants and a mobile workforce.

These flexible housing options are increasingly preferred by young workers and expatriates, delivering rental yields that, in many cases, surpass those of traditional long-term leases.

Nwosu remarked that Lagos isn’t a market that disappears because of short-term volatility,” stating that “The city’s growth trajectory and demographic dynamics give it resilience most African cities can only envy.”

Looking forward, the consensus among industry watchers is that the market will enter a qualitative phase of growth, one defined less by speculative land grabs and more by sustainable development, innovation, and technology-driven real estate solutions, platforms that enhance transparency, efficiency, and investor confidence,” he said.

On her part, property analyst and developer, Funke Bello, explains, “We’re catering to a new generation of renters, mobile, time-conscious and quality-sensitive clientele. That has lifted performance in segments that were once considered secondary.”

She clarified that institutional appetite is growing as well, noting that Real Estate Investment Trusts (REITs), pension funds, and foreign capital are flowing, albeit cautiously, into Grade-A office space and internationally benchmarked retail assets.