A new report has revealed that if Nigeria’s economic recovery maintains its current pace, key commercial segments of the real estate market, including office and retail, which have passed through the hyper-supply and recession phases, are poised to enter a recovery cycle.

The report projects that asset valuations will begin to rise in response to improving macroeconomic conditions, suggesting that acquisition pricing seen in 2024 and 2025 represents the lowest entry point in the next 10-year real estate cycle.

Titled “Nigeria Real Estate Capital Trends Report 2025” and published by Estate Intel Limited, the study noted that average capitalisation rates (cap rates) for recently completed transactions have exceeded 10 per cent, higher than the sub-10 per cent levels recorded in select trades over the past decade.

In Lagos, strong demographic dynamics continue to support residential investment activity, which has been on a bull run since 2020, with no immediate signs of slowing down.

“For the office market, during periods of economic recovery and growth, it is typically the first real estate sector to benefit as businesses expand their footprint or make first entries,” the report stated. “Other sectors, including industrial and data centres, have experienced far more favourable conditions in recent times.”

Since the COVID-19 pandemic amplified the case for data centres as a resilient asset class, Nigeria’s total data centre capacity has grown by an average of 21 per cent yearly, a trend projected to continue until 2030.

According to the report, capacity is expected to expand from 56.1MW in 2025 to over 218MW by 2030, a growth of more than 3.7 times. Major pipeline projects include Equinix’s 20MW facility in Alaro City, Airtel’s 35MW Nxtra Data Centre in Eko Atlantic, and OADC’s 24MW facility along the Lekki Corridor.

“While other sectors have struggled in recent years, the data centre segment has maintained consistent growth, attracting increasing attention from global players such as Equinix Nigeria, OADC, and Digital Realty,” the report noted.

The report highlighted that government reforms aimed at stabilising the economy and restoring investor confidence have begun to yield positive results.

Following four months of relative currency stability, the Naira strengthened to N1,422 per U.S. dollar at the end of October 2025 in the official market. Foreign reserves rose in tandem to $42.1 billion, the highest level since August 2019.

Updated GDP data places Real Estate Services at 13.3 per cent of GDP in 2024, making it Nigeria’s third-largest sector after Trade (18.2 per cent) and Crop Production (17.5 per cent). Construction ranks fifth at 4.7 per cent. Together, the two sectors contribute nearly 18 per cent of GDP, underscoring their central role in urbanisation and national investment growth.

Inflation has also slowed to a 41-month low of 18.02 per cent, while the Nigerian equity market recorded a 49.88 per cent year-to-date gain, reflecting renewed investor optimism.

Founder and Research Director of Estate Intel, Dolapo Omidire, said Nigeria’s property market is responding positively to emerging economic stability, with record levels of commercial property acquisition activity.

“Transaction volumes in 2024 grew fivefold to $336 million, up from $53 million in 2023,” Omidire said. “The growth was primarily driven by acquisitions from income funds and Nigerian corporates seeking to own their headquarters.”

He explained that the real estate services subsector has been one of the most consistent contributors to quarterly GDP growth, reinforcing its role as a key driver of post-reform economic expansion.

Omidire noted that Nigerian corporates and owner-occupiers are increasingly active market participants through office acquisitions and brownfield or greenfield developments, a shift driven by relatively low asset prices in a high construction cost environment and the desire to avoid high-dollar-denominated rents in Lagos’ Grade-A office market.

“In this year’s edition of our capital trends report, we take an in-depth look at Nigerian real estate capital markets, identifying key insights around capital sources, yield expansion, and growing interest in brownfield development and renovations,” he said.

As the year closes, the firm is tracking nearly $50 million in acquisition activity, although Omidire cautioned that the opaque nature of Nigeria’s property market means complete transaction data may not surface until early 2026.

“Nonetheless, this new wave of activity indicates that Nigeria is on track to reintroduce its major cities as destinations for international institutional capital,” he added.