What should Developers Build in Lagos?

What should real estate developers actually be building in Lagos?

Is it terraced houses?
Flats?
Detached houses?

What exactly does the market want?

That was the question a real estate developer asked me while we were having one of those phone conversations that start casually, then become insightful. We were talking land, locations, and how different corridors are shaping up. Somewhere in between the banter, the question dropped.

On the surface, it felt like a straightforward question, the kind that should have a straightforward answer. 

There is a housing crisis. Rents are rising. Young people are struggling to find decent homes. 

At the same time, the growth of short-let rentals across Lagos has added another layer of pressure to an already tight market. Demand for housing, especially for flats and terraces, is loud and visible, coming not just from residents but also from investors and operators. People need places to live, and increasingly, places that can work as income-generating assets.


The developer responded from another perspective. 

He spoke about margins. About how difficult it was to extract meaningful returns from certain projects, especially considering the rising cost of land and different economic factors. About how developers operating in higher-value locations were able to make money differently, not necessarily because demand was stronger, but because capital behaved differently there.

In essence, we were saying two things. One of us was talking about market need, the other was talking about capital reward. And somewhere between those two truths lies the dilemma many developers in Lagos are currently grappling with:

How to maximize their capital while meeting demand?

Photo by Jon Tyson on Unsplash

If the city desperately needs housing, why are developers still unsure what to build? Why do some projects struggle despite obvious demand, while others succeed with fewer units at higher prices?

Then I realized, Lagos is not a single market. And demand alone does not determine profitability. 

Two developers can be looking at the same city, responding to the same housing pressure, and still experience completely different outcomes. The way capital behaves across different locations, price points, and buyer profiles varies. Yet many development decisions are still made as though Lagos operates as a single, unified market.

It doesn't.

Lagos doesn’t reward one type of development logic. What it rewards is alignment between capital, location, buyer profile, and risk appetite. This is why copying strategies across locations often fails. 

Given that context, the question begins to shift.

It is no longer simply "what does the market want?"
It becomes what market does a developer want to operate in?

And once that is clear, a more useful question follows:
As a developer, what can I realistically offer this market?"

That distinction, between asking what the market wants and deliberately choosing the specific market one intends to operate in, often determines not just what gets built, but whether capital is deployed sustainably.

written by Morenike Akeke