A report published by Alitheia Capital in 2011, suggested that Nigeria’s short stay serviced apartment industry held a good potential for real estate investments. A phenomenon that has been proved to be valid in the last 5 years. Today, traditional hotels are gradually losing market share to serviced apartments or short let homes.
Before now, short-let apartments were mostly patronized by professionals from oil companies, telecommunications companies, and diplomats; but this has changed as more politicians, tourists, celebrities and entertainers now opt for short stay serviced apartments when they travel to a new city. According to a Market Watch report, the short-term rental market has exploded in recent years, with a predicted occupancy rate of 70% in 2021.
Short let apartment demand is on the rise for a variety of reasons.
From our research, we have identified 4 reasons contributing to increasing demand for short let apartments, and we’ll be sharing them below.
Cost Savings
Recent surveys indicate that the major reason more people are opting for serviced apartments over hotels is cost. “Depending on the duration of time, cost savings on service apartment occupancy range from 10% to 25%,” according to Go Native.
The Guardian gathered that a one-bedroom in Shonibare estate, Maryland, Lagos, goes for N30,000, two-bedroom for N45,000, three-bedroom for N70,000 per day inclusive of the services clients enjoy. Also, a fully-furnished luxury two-bedroom short-let apartment goes for N65,000 in Maitama, Abuja. This is cheaper compared to having to pay for a 5-star hotel within the same cities.
The high vacancy rate in residential properties
Short letting assumed a new dimension in Nigeria’s real estate sector, with some property owners using it to recoup their investments due to high vacancy rates in choice areas. For example, the vacancy rate in residential developments is estimated to be at 33% in Lagos, 28% in Abuja, and 13% in Port Harcourt.
Home away from home
Imagine staying in a 2-bedroom apartment with all the amenities of a hotel such as internet, swimming pool, gym, exquisitely furnished kitchen, and other amenities, but with the added benefit of unlimited privacy and a fully furnished apartment without having to go through the hassle of purchasing furniture or other household materials.
Coronavirus Pandemic
The recent covid19 pandemic has also led to the increase in demand for short let homes for travellers who do not want to expose themselves while using a hotel room. While a few others have opted for short let apartments to enable them to complete the required 21 days isolation period.
In conclusion, some people dislike staying in a traditional hotel and prefer short-term rentals, where they can cook for themselves and enjoy their own adventures and privacy. This trend is expected to rise as the sector has attracted more investors and is currently undergoing digital transformation.
Watch out for this feature on our upcoming OPOD homes and apartments.
