Real Estate Holds 13.10% of Nigeria’s GDP, Says Knight Frank H1 2026 Report
* Prime Lagos rents more than double since 2023
Real estate remained one of Nigeria’s largest economic pillars in the first half of 2026, contributing 13.10 per cent to real Gross Domestic Product (GDP), as lower inflation, a steadier naira and the new Nigeria Tax Act 2025 reshaped demand across the Lagos, Abuja and Port Harcourt property markets, according to a new report by Knight Frank Nigeria.
The Lagos Market Update H1 2026, released Monday, showed that real GDP grew by 3.89 per cent in the first quarter, construction expanded by 6.38 per cent, and headline inflation eased to 15.91 per cent in June from 25.29 per cent a year earlier. The naira held between N1,360 and N1,380 per dollar, while external reserves rose above $51 billion.
Senior Partner/CEO of Knight Frank Nigeria, Mr Frank Okosun, noted that: “The first half of 2026 was a period of consolidation. Inflation is well below its recent peaks, the naira has been more predictable and reserves are stronger, giving developers, investors and occupiers a firmer basis for planning. Real estate contributing more than 13 per cent of GDP confirms that property remains central to the country’s economic story.”
In Lagos, rents in prime districts such as Ikoyi, Victoria Island, Banana Island and Lekki Phase 1 recorded the strongest growth, with rents in several locations more than doubling since 2023. Annual rents for three-bedroom apartments now range from N22 million in Lekki Phase 1 to N45 million in Banana Island. Under the Nigeria Tax Act 2025, residential sales and leases are exempt from Value Added Tax (VAT), while withholding tax on individual residential rents has been removed. Prime office rents stabilised at about $55 per square metre per month, with landlords offering rent-free periods rather than cuts.
“Prime residential rents keep climbing because supply remains structurally tight, while affordability is pushing Mainland developers towards smaller units. In the office market, landlords are competing through rent-free periods and fit-out contributions rather than headline cuts, which suggests the market may be approaching a pricing floor,” said Lead Research Analyst, Mr Daniel Fabi.
Meanwhile, in Abuja, City-centre values continued to rise, driven by diaspora investment, which accounts for 70 to 80 per cent of sales for some developers. Property values in Guzape I and II are rising by an estimated 20 to 30 per cent, while office rents grew by over 10 per cent as the NRS, ECOWAS and Africa Re buildings added new space.
In the case of Port Harcourt, the market remained resilient, anchored by the oil and gas sector. Prime demand is concentrated in Old GRA, GRA Phases 1 to 3 and Peter Odili Road, while the mid-market is stronger in Rumuodara, Rumukwurushi and Eliozu.
“Lagos is driven by tight supply and infrastructure, Abuja by diaspora capital and emerging districts, and Port Harcourt by the energy sector and a growing mid-market. Across all three, occupiers are placing a premium on quality, security and reliable utilities,” said Head of Marketing and Corporate Communications, Mr Lanre Sonubi.
Knight Frank Nigeria is a member of Knight Frank LLP, the leading independent global property consultancy, serving as our clients’ partners in property for over 128 years globally, and 60 years in Nigeria. Headquartered in London, Knight Frank has more than 20,000 people operating from 384 offices across 51 territories. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants.