Nigeria’s health sector has an estimated annual deficit of $10 billion, according to a report by Northcourt, a real estate investment solutions company.
The report revealed that Nigeria imported $1.45 billion pharmaceuticals in 2019, which was a 182 per cent increase year-on-year, with demand still on the increase due to the pandemic.
The real estate firm stated this in its 2021 Nigeria Real Estate Market Outlook, obtained recently.
“The demand for healthcare in Nigeria has never been in doubt. Supply however has been lacking, requiring updated policies and innovative financing. The Nigerian government is prioritising healthcare projects,” it stated.
According to the Lagos-based firm, the Nigerian real estate market has had to switch gears due to the disruption caused by the pandemic.
Strategic asset management will be central to positive yields in 2021, it stated, adding that technology and disruptive service delivery models would be key going forward.
The structural changes accelerated by COVID-19 are likely to continue, it added.
It noted that the office market will lose some ground to residential, which is growing
It noted that due to COVID-19, the nation’s outdated infrastructure was once more in the spotlight, saying that e-Commerce, logistics and warehousing experienced significant growth as opportunities were uncovered.
It anticipated recovery in the market for co-working spaces earlier than the market for grade A office.
“Grade B+ and residential to office conversions with rentals under $350psm seemed unaffected by the challenges affecting the demand for office space. Student accommodation and religious uses were also affected – the former a bit more than the latter due to the academic staff union’s strike.
“Economic challenges suggest that meeting occupation obligations might be challenging. Projects are now more deliberate in their conception, emphasising rigorous data analyses. They are more likely to succeed,” it stated.
The report pointed out that year 2020 reinforced the need to make property portfolios more resilient, stating that price shifts as a result of the pandemic led to a focus on currency protection mechanisms. Furthermore, it predicted that the pause on large retail developments would continue, stating that they are unlikely to be feasible from a return’s perspective.
“Short let apartments have shown much resilience as they represent a sustained demand for flexible accommodation. As some retailers have exited the market, others are reassessing their footprint. Construction costs have increased due to challenges with the global supply chain.
“Most planned projects will likely be put on hold as the sector reconfigures into the form most fit for long-term viability. Increased demand for short stay apartments and flexible office space near major residential areas as occupiers come to terms with their new lifestyles,” it added.
Continuing, in the residential sub-sector, the report showed that the preference for one-bed and 2-bed flats topped the list of property types in demand within Lagos, Abuja and Port Harcourt.
The report listed security, stable power, privacy and good roads as common must-haves.
It stated that to reduce costs, businesses had begun cutting down on office floor space since 2018 and were losing share to the then growing co-working space service providers.
“This trend is likely to be interrupted given that some employers are finding that not all functions perform efficiently remotely. Few companies are expected to close their offices altogether even as the pandemic evolves.
“Others may need more space for their employees who come in to accommodate social distancing. Overall floor space may not increase as fewer individuals come into the office and the demand for private offices could also rise as employees may be reluctant to work in open plan arrangements. For some industries, however, work-from-home (WFH) could become a more permanent feature.
“The larger open spaces associated with sub-urban office parks is perceived as a healthier environment and also tend to be significantly less expensive. Companies now retain their core office space in central business districts while allowing nodal office structures and flexible WFH opportunities
“Analysts suggest that demand could return as companies seek short-term leases for employees working remotely. Building designs that are not conducive to changing working preferences stemming from social distancing practices, could become obsolete.
“It will require investments ranging from changing floor plans and redesigning common areas combined with increased janitorial hours, improved air filters, touchless lighting control, faucets, and automatic doors,” Northcourt noted.