Hi all, we have recently published our latest real estate report which can be found at mcorealestate.com/research. The report analyses the bouyant Lagos Real Estate Market in the context of a year characterised by presidential elections, a halving of the oil price and a threat of a currency devaluation. We hope you find the report insightful and that it introduces you to institutional investment opportunities in the Nigerian real estate space.

1. International perspective, local expertise
Lagos, Nigeria Real Estate Investment Report Q3-Q4: 2015
HIGHLIGHTS
Introduction: A successful presidential elections and fiscal
responsibility have laid a good foundation for the stability
required to continue along the path of economic
development particularly in the face of lower oil prices
and the attendant challenges to operating a fiscally
balanced budget
Nigerian
Economy:
 Recent appointment of Ministers bodes well for focused
economic direction and policy implementation
 The fear of an imminent devaluation appears to have
subsided with the expectation of increased foreign direct
investment into 2016
Q3/Q4 Real Estate Market:
 Overview The year to date has been quiet with few big ticket transactions taking place. Investors however
have been positioning themselves with the expectation of an increase in the volume of
transactions into 2016
 Finance Government policy is moving away from reducing inflation towards jobs creation with efforts being
made to increase liquidity in the system and bring down interest rates
 Land Land prices have remained stable over the year on the back of little transaction activity
 Residential High end residential property continues to suffer from a supply overhang while the mid-range
market continues to be benefit from the strong demand from a large population seeking to own
homes at a price they can afford
 Retail The retail development pipeline remains strong supported by the huge consumer base seeking an
improved shopping experience
 Commercial
Office
A very strong pipeline of new developments coming to the market in 2015-2016 suggests a
rotation out of Grade B space into Grade A space without attendant rent increases
 Hospitality The economic slowdown has led to a challenging 2015 for the hospitality industry with the hope of
improvements to come as the economy picks up into 2016
1. INTRODUCTION
We introduce our Q3/Q4 2015 Lagos Real Estate Investment Report analysing the Lagos real estate market over the year to
date. Our report focuses on investment and development activity in the Lagos and Nigerian markets. We trust it will bring
clarity to your investment decision making process as you seek to create value in the Nigerian real estate markets.
This has been a slow year, with the economy paralysed by the spectacle of a change in government, a halving of the oil
price and a potential devaluation of the naira within the context of an emerging economy dependent on revenues generated
from crude oil sales. Nigeria has turned out to be more resilient than some had predicted. Nigeria is still here and with a
steady hand on the tiller and the oft repeated attractive story of the widening and deepening consumer base, we are very
positive that there are excellent investment opportunities ahead waiting to reveal themselves to the savvy investor.
We believe you will enjoy our latest report and hope that it assists your decision making process in relation to investment in
Lagos within a wider Nigerian context. If you find this report of value, we ask that you kindly forward it to your in-house

2. International perspective, local expertise
Lagos Real Estate Investment Report
Q3/Q4: 2015
2
Copyright © MCO Real Estate, 2015. All rights reserved
investment team or to any colleagues involved in African Real Estate with a focus on Nigeria. Please also feel free to
contact us or visit our website for further information on how we can assist you.
2. NIGERIA ECONOMIC OVERVIEW
Based on figures released by the National Bureau of Statistics, 2015 third quarter Gross Domestic Product (GDP) grew by
2.84 per cent year-on-year in real terms. This was higher by 0.49 per cent than the growth of 2.35 per cent recorded in the
preceding quarter, yet less than half of the 6.23 per cent figure recorded in the same quarter of 2014. The slowing of the
economy has been attributed to the steep fall in the oil price since the beginning of 2014 and the attendant fall in oil
revenues over the period. Real oil sector growth increased by 1.06 per cent year-on-year in Q3 2015 while the sector
contributed 10.27 per cent to national GDP growth. Growth in the non-oil sector was largely driven by the activities of
agriculture, financial services, telecommunications, and trade amongst others. The non-oil sector grew by 3.05 per cent in
real terms in the third quarter of 2015 and contributed 89.73 per cent to GDP growth over the year leading up to the third
quarter.
Year-on-year headline inflation edged up by 0.1 per
cent to 9.4 per cent in September compared to 9.3 per
cent in August, Inflation has been on a gradual
upward trend compared to the 9.2 per cent rate in
June and July, 2015 and 8.3 per cent recorded in
September last year.
Inflationary trends were mainly due to higher energy
prices, delayed harvests and pass through from
imports.
3. REAL ESTATE OVERVIEW
LAGOS REAL ESTATE MARKET OVERVIEW
The focus on the handover to a new government over the year led to a fall in investment activity while policy was being re-
aligned to reflect the new face of government. In addition to the heightened political risk, the oil price fall negatively impacted
revenues earmarked for capital expenditure and led to a slow-down in economic activity. Reduced oil revenues led to a
devaluation of the naira with a fear of a greater devaluation to come. The fallout of all this volatility in the markets meant that
even with considerable investor interest, international investors who have the greatest impact on big ticket real estate
transactions have spent the year waiting for greater clarity on the state of the economy. However, local transactions with
little or no exposure to currency risk have continued to thrive. Developments in the middle market residential space, middle
market retail space and local hotels still continued to sustain the real estate and construction markets albeit in an economy
based on the reduced spending power of the consumer due to the economic downturn.
Beyond the short term, the Nigerian demographic story of a strong and growing consumer base continues to attract
international investment into the real economy and is expected to continue to support commercial real estate development
going forward. It is expected that in the medium term, the successful handover to a new government and the subsequent
reduction in political risk and increased financial and economic stability will create an economic environment that fosters
investment sustainability and growth.
REAL ESTATE FINANCING
The Federal Government in recent times has shifted from a tight fiscal policy with a focus on capping inflation towards a
looser policy aimed at stimulating local economic growth and job creation. This change in policy has translated to the recent
easing of the Cash Reserve Ratio by the Central Bank of Nigeria from 31 to 25 per cent leading to an estimated N740 billion
(US$3.75 billion) liquidity injection to the banks. It is hoped that this increased liquidity will lead to greater lending by banks
to the real economy with the hope of a fall in the high lending rates currently prevalent in the market.
Lending rates in the local market remain stubbornly high at 20 per cent and above other than to the bank‟s preferred
customers. Such high rates are not sustainable for real estate development where the gestation period in most cases is at
least two years before any rental revenues start to accrue.
Nigerian Economic Metrices (Oct 2015)
1 MPR 13.00%
2 USD/NGN 197.00
3 External Reserves US$30.06Bn
4 Bony Light US$47.37
5 Inflation (Sept) 9.40%
6 GDP Growth (Q3 2015) 2.84%
Source: Central Bank of Nigeria, NBS

3. International perspective, local expertise
Lagos Real Estate Investment Report
Q3/Q4: 2015
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Copyright © MCO Real Estate, 2015. All rights reserved
In the wider international markets, the continued
trend towards very low interest rates has led
investors seeking higher returns to source such
returns globally International investors are
becoming more savvy in understanding local
Nigerian risks and how to mitigate them and we
continue to see a greater number of international
investors seeking well structured, well organised,
high profile real estate projects that they can
develop in conjunction with strong local partners
that will offer them attractive returns in relation to
the amount of risk involved in operating in the
Nigerian real estate space.
PRIME LAND PRICE MOVEMENTS
Notes
1. Land value data is derived from advertised sales prices
2. Eko Atlantic prices are blended waterfront and non-waterfront prices
3. N/US$ rate of 197 is used to convert Naira to dollar values
Land in Banana Island, Ikoyi at N414,000 ($2,101) psqm is currently the most expensive land in Lagos followed by Ikoyi at
N337,000 ($1,700) psqm. Eko Atlantic remains stable at $1,500 psqm or $2,500 psqm for waterfront land. Over the year,
districts within Lagos Island have been on two separate tracks regarding land price appreciation with some areas in the fast
lane and others in the slow lane. Lekki Phase 1 has shown the strongest land price appreciation over the year, doubling in
value from N121,000 psqm to N242,000 psqm over the year due to increased commercial activity, the positive impact of the
Lekki-Ikoyi Link Bridge and the emerging maturity of the location as a prime commercial and residential district of Lagos. On
the other hand, Victoria Island and Ikoyi at 0 per cent and 4 per cent growth respectively reflect the maturity of both districts
with their appreciation potential found in real estate development as opposed to land banking. Eko Atlantic, Banana Island
and Oniru have all shown various levels of appreciation of 8 per cent, 36 per cent and 39 per cent respectively.
THE RESIDENTIAL MARKET
Ikoyi and Victoria Island Prime Residential (+N120m / +US$500,000)
A lack of a clear petroleum policy, a halving of the oil price and a move from onshore to deep water drilling have all had a
negative impact on International Oil Companies staff strengths and hugely impactful knock on effect on demand for Ikoyi
luxury apartments leading to higher vacancy rates now prevalent in that market in particular. The Victoria Island market has
not seen anywhere near the recent levels of over-supply and as such has been more resilient to changing patterns of high
end occupation. The Ikoyi luxury market has additionally been negatively affected by the Lagos State Governments policies
Real Estate & Constr Bank Lending Rates Oct 2015
Prime (%) Max (%)
1 Guarantee Trust Bank 13.00 27.00
2 Standard Chartered Bank 16.00 16.00
3 Stanbic IBTC Bank 16.00 26.00
4 Diamond Bank 17.00 25.00
5 FCMB 17.50 25.00
6 Zenith Bank 18.00 24.00
7 Access Bank 18.00 24.00
Low est rates. Sampling of 21 banks. Source: Central Bank of Nigeria
October November December January February March April May June July August September
VI 369,934 421,679 394,191 364,770 294,976 425,000 369,659 427,478 397,143 307,619 336,954 369,153
EKO ATLANTIC 313,714 313,714 313,714 325,714 325,714 325,714 336,000 336,857 336,857 337,714 337,714 337,714
IKOYI 325,805 330,768 364,929 310,331 308,843 301,933 339,625 336,245 355,327 334,264 368,799 337,232
BANANA ISL 305,172 310,265 247,287 377,423 338,846 349,318 394,333 375,183 392,441 306,909 370,585 413,960
ONIRU 117,661 114,607 115,714 124,371 145,501 132,537 130,762 114,705 124,307 126,806 155,771 163,422
LEKKI 1 121,094 133,398 127,273 136,766 159,219 131,864 155,554 163,530 204,923 168,458 158,789 242,117
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
Naira Values ps qm
Lagos Island Prime Land Prices (Oct 2014- Sept 2015)

4. International perspective, local expertise
Lagos Real Estate Investment Report
Q3/Q4: 2015
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Copyright © MCO Real Estate, 2015. All rights reserved
of increasing densities in Ikoyi leading to a huge increase in supply of luxury residential apartment towers over the last 5 –
10 years. The gradual rise of Eko Atlantic City as an alternative destination for prime residential development does not offer
any long term solace to Ikoyi‟s luxury residential apartment tower market‟s current woes.
The Middle Market (N25-N120m), Affordable Housing (N12m – N25m)
The number of projects moving from the drawing board to realisation suggests both the demand for middle market
residential housing but also the improved capacity of buyers to meet the affordability criteria and access the product. Both
Lagos and Abuja remain strong markets for the supply of middle market residential housing.
THE COMMERCIAL OFFICE MARKET
Lagos remains one of the most expensive cities in Africa to lease institutional grade commercial office space. With new
commercial office developments hitting the US$1,200 psqm mark, the Lagos commercial office market once again appears
to be powering ahead compared to the doldrums of the last few years. The recent leasing up of Civic Centre Towers attests
to the lack of prime Class A commercial office space available in Lagos. Much needed additional prime quality space
including Heritage Place, NESTOIL Towers, Wings Tower etc are currently leasing up for opening in 2016. Quality space is
still in high demand from multinationals, financial Institutions, oil and gas companies as well as telecommunication/IT
companies all seeking a prestige location in Victoria Island and Ikoyi.
The resilience of the market is even more remarkable considering that the economy is emerging from a very slow year with
very little activity following the heightened political risk over the last year due to the change in government. With Nigeria‟s
very attractive demographic profile continuing to attract global consumer goods companies, the settling down of the new
government and the positive policies being put in place appear to suggest that the commercial office market is yet to
continue on a stable upward trajectory.
THE RETAIL MARKET
The retail revival continues to build up momentum on the back of the demographic story of a growing population with an
increasing disposable income leading to re-invention of the retail shopping experience. This has led to retail re-development
all the way from modern retail malls to traditional open markets. However, challenges remain; from the difficulties of securing
large tracts of land with good title to the challenges of securing the required financing for the large capital outlay required to
build out such large developments. The perceived challenges have led to increased interest in opportunities for expansion in
secondary city developments. Examples of such include African Capital Alliance‟s 12,100 sqm Onitsha Mall currently
undergoing development and due to be completed in 2015 and Persianas Group‟s 10,000 sqm retail developments in Ilorin
and its 21,000 sqm development in Ibadan. Even further afield, the Aba Mega Mall, a highly ambitious shopping and
logistics hub of 100,000 sqm leasable space on 28 hectares has recently opened in Aba, Abia State.
THE HOSPITALITY MARKET
It is often quoted that in 2000 the Economist magazine “wrote off” the entire continent of Africa with the headline “The
Hopeless Continent”. Commentators will also tell you about “Africa Rising”, the 2011 headline from the same source. What
would they say today? If the last 2 years are anything to go by, we would propose “Africa, the Rollercoaster Continent” or
“Africa, Unpredictable”.
The hotel industry in Nigeria has been hit by wave after wave of problems, starting with the Boko Haram-related security
issues in early 2014 and the mid-2014 Ebola crisis, which had a negative impact on hotel occupancies throughout the entire
continent. The oil price crash, the devaluation of the Naira, election uncertainties, the lack of activity after the much-lauded
(and unexpected) result and, more recently, the China impact, importing less of what Africa produces and exporting less to
Africa because of the slowdown and currency devaluations here, have led to what appears to be a seemingly inevitable
downward spiral.
Whilst demand for hotels has been negatively affected by all these external factors, there is light at the end of the tunnel, as
travellers adjust their perception of risk, and accept that change is a fact of life. The good news for investors in existing
hotels is that future additions to supply are at the lowest level for many years. In Abuja, the only hotel under construction
with an international brand is the Fraser Suites in the CBD. In Lagos, only one internationally branded hotel Mantis‟ 62-
room The George, opened in 2015, and there is very little likely to open in 2016 or 2017. Work has been stalled for many
years on the Le Meridian in Ikoyi, and work has stopped on the Marriott in VI. However, the Hilton in Ikoyi has started
ground works.

5. International perspective, local expertise
Lagos Real Estate Investment Report
Q3/Q4: 2015
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Copyright © MCO Real Estate, 2015. All rights reserved
Even though Nigeria‟s growth rate has fallen considerably this year, it is still in positive territory and whilst we may be
bumping along the bottom presently, we still see an upturn in the industry in the near future buoyed by an increase in global
growth and a return to stability in the local markets. Positive days are ahead.
Courtesy: W Hospitality Group
4. ABOUT US
MCO Real Estate („MCORE‟) is a real estate investment and advisory firm founded in 2010 with a focus on investment and
structured finance towards the delivery of large scale real estate investment opportunities. We structure and arrange finance
for developers and investors, we originate and package investment opportunities on behalf of local and international clients
and we provide research and transaction advisory services across all property types to enable our clients make the right
investment decisions.
Our clients include multiple development companies, local and international investment companies, oil and gas companies,
engineering and consulting firms, high net worth individuals, family offices and public and private corporations. We are
members of the Association of Investment Advisors and Portfolio Managers and also members of the UK Society of
Investment Professionals. We believe that by partnering with MCORE, we will afford you a level of expertise and experience
that will avail you a much greater probability of achieving success. Call us now to discuss how we can enhance value in your
world.
CONTACT US
Munachi C Okoye
Managing Director
MCO Real Estate Limited
5th Floor Mulliner Towers,
39 Alfred Rewane Road
Ikoyi, Lagos, Nigeria
2.
3.
4. Tel: +234(0)806 924 5688
5. Email: info@mcorealestate.com
6. Web: www.mcorealestate.com
Important Risk Warnings and Disclaimers
This document includes information obtained from sources which MCO Real Estate Limited („MCORE‟) believes to be
credible but which it has not independently confirmed. MCORE, its advisors, directors or employees do not make any
assurances, guarantees, representations or warranties as to its accuracy, reasonableness or completeness and neither
MCORE nor its advisors, directors or employees accepts any liability whatsoever (in negligence or otherwise) for any loss
howsoever arising from the use of this document or its contents or otherwise arising in connection with this document. The
opinions presented in this report may be changed without prior notice or cannot be depended upon if used in the place of
the investor‟s independent judgement.