When people talk about real estate investment, one phrase that always comes up is “location, location, location.” But what truly defines a great location? While factors like neighborhood reputation, security, and demand play a role, one of the biggest game-changers is infrastructure development.
Across Nigeria and many developing economies, infrastructure projects—such as roads, rail lines, airports, bridges, and energy supply—can dramatically increase property values. It’s no coincidence that land in areas close to major highways or ongoing projects suddenly becomes hot property. But why does this happen, and how can real estate investors, landlords, and even first-time buyers capitalize on it?
Why Infrastructure Development Increases Property Values
Infrastructure is the backbone of any growing city. When new projects are launched, they create better accessibility, boost economic activities, and increase the desirability of an area. Here are 3 key growth indices on how infrastructures improve a community;
1. Improved Accessibility & Connectivity
One of the biggest obstacles to property appreciation is poor road networks. For context, two identical houses—one located along a newly constructed expressway and another in a remote area with bad roads. The house with better accessibility will always be worth more.
Just as when the Lekki-Epe Expressway expansion was announced, land values in Ajah, Ibeju-Lekki, and Sangotedo skyrocketed. The same happened in Abuja’s Airport Road corridor after upgrades, making properties in Lugbe and Kuje more attractive.
2. Increased Demand from Businesses
Infrastructure development doesn’t just attract homeowners; it also draws businesses looking for better locations. When new roads, rail lines, and power grids are introduced, commercial activity flourishes, bringing more jobs and increasing demand for housing.
Using Eko Atlantic City as a reference, the presence of modern infrastructure, including smart city planning, self-sustaining power grids, advanced drainage systems, and a well-planned road network, has made it one of the most sought-after for high net-worth individuals and multinationals, with properties commanding premium prices.
3. Boost in Social Amenities & Livability
Infrastructure projects don’t just improve transportation—they also enhance the overall quality of life in an area. The introduction of amenities like modern drainage systems, reliable power supply, better water distribution, and internet connectivity significantly raises property values.
For instance, areas with constant electricity supply and well-maintained public spaces— tend to have higher property prices. Additionally, new healthcare facilities, schools, and recreational centers make neighborhoods more attractive to families and professionals.
How to Identify Upcoming Infrastructure Trends
Knowing how to spot areas set for infrastructure development can give you a major advantage in property investment. Here’s how:
1. Follow Government Announcements and Budgets
Governments typically announce infrastructure projects in annual budgets and strategic development plans. Following press releases, from the Federal Ministry of Works & Housing and State Government can provide early insights into the next big projects. Post-Covid, many properties along the Lekki-Epe have witnessed an alarming increase in price points, nearly 400% increase with the advent of numerous public-private infrastructural projects.
2. Observe Construction and Survey Activities
Frequent land surveys, road markings, and government visits to certain areas can indicate upcoming projects. Pay attention to increased surveying activity, land acquisitions, and demolition notices—these often precede large-scale developments.
3. Track Private Sector Interest
Infrastructure development isn’t just government-driven; private-sector projects also play a major role. If major corporations, industries, or developers begin acquiring land in a specific area, it’s a strong signal that development is imminent.
For example, when major players like Dangote Group and China Harbour Engineering invested in the Lekki Deep Seaport, property values in the surrounding areas skyrocketed.
4. Monitor Real Estate Market Trends
Property prices often rise in anticipation of infrastructure projects. Real estate listings, price changes, and increased buying activity in previously overlooked areas can indicate upcoming growth. Check out platforms that provide valuable insights into emerging real estate trends.
Potential Risks & Considerations
While infrastructure boosts property values, there are risks to watch out for:
- Speculation traps: Some areas experience price hikes based on infrastructure promises that never materialize. Always verify government plans before investing.
- Demolition risks: If your property is too close to road expansions or new railway projects, it might be affected by government acquisition.
- Delays in execution: Infrastructure projects sometimes take longer than expected, delaying the expected property value increase.
Infrastructure development plays a crucial role in shaping real estate markets. Whether it’s new roads, rail lines, airports, or commercial hubs, areas experiencing major projects often see increased property demand and value appreciation.
The key to making money from this trend is timing—buy before completion, choose locations strategically, and think beyond just residential property. So, if you’re looking to capitalize on Nigeria’s infrastructure boom, now is the time to think beyond today’s property prices and focus on tomorrow’s real estate hotspots.
