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Dangote Refinery: Its Impact on the real estate market in Ibeju-Lekki and environs

Dangote Refinery: Its Impact on the real estate market in Ibeju-Lekki and environs

The turning of the first sod for the newly commissioned Dangote Refinery occurred in April 2016. With 65 million cubic metres of sand dredged at over $300M, the $19Bn refinery sits on a land size of approximately 2,635 hectares (7 times the size of Victoria Island, Lagos). Dubbed to meet 100% of Nigeria’s demand for refined products when at full operations capacity, Dangote Refinery is poised to reduce the nation’s reliance on imported petroleum products. So what are the likely economic benefits of the refinery to the Nigerian economy? Its ripple effects include:

  • Promoting Nigeria’s energy security and export capacity.
  • Increasing foreign exchange reserves.
  • Strengthening local manufacturing and employment generation.

The Lekki Free Trade Zone, located within the Ibeju-Lekki-Epe axis of Lagos State, houses the Dangote Refinery and other industrial projects. In the last 6 years, the Ibeju-Lekki-Epe real estate market has seen heightened investment activities because of growing industrial activities. With current land prices circa ₦‎55,000/sqm, as against ₦‎1,200/sqm in 2017, Ibeju-Lekki and its environs have seen enormous growth evident in the increasing commercialisation and launch of more residential developments, including estates within the area.

The looming infrastructural stress along the roads leading to the Dangote Refinery remains a concern in spite of the continuous upgrade and provision of road infrastructure along the Ibeju-Lekki and Epe corridors. Earlier in the year, reconstruction works were completed on the 18.75km Eleko-Epe T-Junction stretch, which entailed upgrading and expanding the deplorable 2-lane road to a rigid concrete 6-lane carriageway. Subsequently, construction has commenced on the 26.7km Eleko-Abraham Adesanya roundabout stretch. All of these, including the 8.75km Lekki Regional Road, which will connect Freedom Way to Victoria Garden City, are setting the ground for the upcoming 4th Mainland Bridge to decongest the Lekki-Epe Expressway further.

Upon full operations of the refinery, coupled with the expected movement of heavy-duty trucks and tankers along the roads leading to the refinery, a proper and consistent road construction and maintenance system would be required to keep the roads in the best shape. A boom in the rental market is likely along the corridor as more residential developers and investors are driven to launch or complete their offerings to meet the effective demand. As the Ibeju-Lekki-Epe axis continues to evolve with increased real estate investments and activities, a case can be made for the emergence of more new towns and industrial parks to aid agglomeration economies in the area.

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