Home > Real Estate Properties > 5 Types of Real Estate in Nigeria You Can Invest in: A Guide for Beginners

Nigeria’s real estate market is valued at US$2.61 trillion (Statista). This means that the sheer size of the market offers opportunities for significant returns on investment.

So, if you’re looking to get a share of this market, understanding the types of real estate helps you figure out the best place to invest your money.

This article breaks down the property types (asset classes) in Nigeria, what they are, and how you might choose each one.

5 real estate property types in Nigeria to invest in

The 4 categories of real estate include:

1. Residential real estate

2. Commercial real estate

3. Speciality real estate

4. Hybrid real estate

5. Land real estate.

1. Residential real estate

Residential real estate includes homes built for people and families to live in. In Nigeria, the large population (227.71 million as of 2024) and urban migration ensure that demand for residential real estate remains high and constant.

So, the market is huge because it addresses the fundamental human need for shelter. Everyone needs a place to live, and this need drives the market for buying, selling, and renting properties.

Examples of residential real estate

Here are examples of residential properties:

• Single-family homes

• Flats or apartment buildings

• Condominiums

• Terraced houses.

I. Single-family homes

These are separate, stand-alone homes built for one family. They usually sit on their own private plot of land.

II. Flats or apartment buildings

These are homes built for different families or people to live in separate units. They range from duplexes (two units) and triplexes to large apartment complexes.

III. Condominiums (Condos)

These are individual housing units within a bigger building. You own the title to your specific interior space, while you jointly own the common areas (e.g., hallways, pools, or compound) with other residents.

IV. Terraced houses

These are homes with multiple floors that are attached to other houses on one or more sides. They usually have their own front door and sometimes a little compound.

Why you should invest in residential real estate

• It’s in high demand and attracts high-net-worth tenants or buyers.

• It can generate a steady stream of passive rental income through a monthly cash flow.

• It's a great way to diversify your investments and build wealth for the future.

• Its value can appreciate over time. This makes it a popular investment option and usually the safest starting point for new investors.

Ultimately, if you want an immediate, steady income, consider investing in residential properties in middle-class areas.

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2. Commercial real estate

Commercial real estate is the business of space. It includes buildings or land intended to generate profit, either from capital gains or rental income.

Unlike residential real estate (designed for homes), commercial real estate is for business-related activities.

In Nigeria, the huge commercial real estate market is driven by the need for businesses to expand their physical locations to grow and manage logistics better.

Examples of commercial real estate

Here are examples of commercial properties:

• Office spaces

• Retail spaces

• Industrial spaces.

I. Office spaces

These are buildings used for administrative, professional, and management services. Examples include high-rise central business district (CBD) towers to suburban office parks, classified as Class A (premium, modern), Class B (good quality, moderate rent), or Class C (older, functional).

II. Retail spaces

These are properties where goods and services are sold to consumers. Examples include shopping centres (malls), shop fronts, standalone retail stores, and specialised properties such as restaurants.

III. Industrial spaces

These properties are designed for manufacturing, production, storage, research and development, and distribution.

Examples include:

• Warehouses for the storage of goods

• Distribution centres to move products quickly

• Manufacturing plants for the production of goods.

Why you should invest in commercial real estate

1. It brings in the highest rental income and usually involves longer lease agreements. This provides you with a stable income stream.

2. It's also a good way to spread out your investments and could make you more money than other investment options.

3. It can appreciate in value over time and help you build your wealth, just like residential real estate.

Commercial properties require more capital to get started. But a good entry point for beginners is often a small retail shop in a bustling neighbourhood market, or a Real Estate Investment Trust (REIT) that invests in large commercial properties.

3. Speciality real estate

Speciality real estate (“special purpose” or “unique” properties) is a broad category for properties that don’t fit into the standard sectors. These properties are designed for a very special use and can’t be easily converted for alternative purposes.

In Nigeria, speciality real estate is a big deal. It's a market that hasn't been fully tapped yet, and this means it has huge potential to grow.

Examples of speciality real estate

Here are examples of speciality properties:

• Healthcare facilities

• Recreational & entertainment properties

• Short-let/Vacation rentals

• Educational institutions

• Hospitality properties

• Agricultural properties.

I. Healthcare facilities

These include hospitals, surgical centres, specialised medical clinics, and long-term care facilities.

II. Recreational & entertainment properties

These include theatres, cinemas, golf courses, stadiums, theme parks, and bowling centres.

III. Short-let/Vacation rentals

These are fully furnished residential apartments rented out for short stays (days or weeks), often via platforms like Airbnb.

IV. Educational institutions

These include secondary schools, universities, private schools, and specialised research laboratories.

V. Hospitality

These include highly specialised hotels (e.g., beach hotels, historical landmarks) or large resorts with integrated infrastructure.

VI. Agricultural properties

These include vineyards, certain types of greenhouses, and processing plants for specific produce.

These properties serve a specific purpose. Other examples are churches and government buildings.

Why you should invest in speciality real estate

1. It can generate significantly more income than traditional yearly rent, especially in tourist or high-business areas.

2. The properties often have specific uses, which can lead to more stable and predictable income streams.

3. Tenants pay a premium to live, work, and shop in the same secure location. So, it’s excellent for long-term capital appreciation.

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4. Hybrid real estate

Hybrid real estate includes single buildings or estates that combine residential (apartments), commercial (offices), and retail (shops) spaces. That is, they blend different property types and services into a single, integrated property.

This seamless integration creates a vibrant, self-contained community where people can live, work, and shop. So, it attracts different investors, giving them convenient options and total flexibility.

Examples of hybrid real estate

Here are examples of hybrid real estate:

• Mixed-use developments

• Live-work spaces

• Retail-residential complexes

• Industrial-commercial hybrids

• Hotel-residential hybrids.

I. Mixed-use developments (MXD)

This is the most common form of a hybrid property. They are properties that combine residential, commercial, and office spaces in one project.

They can have a retail space on the ground floor, office space on the middle floors, and residential apartments above within a single building or planned complex.

II. Live-work spaces

These are properties that combine office spaces or studios with residential units. They’re specifically designed to allow the occupant to use a portion of the space as their home and another portion as their dedicated office or studio.

III. Retail-residential complexes

These are buildings that have shops or restaurants on the ground floor and residential units above. For instance, an office building that includes a corporate guest suite or short-term executive apartments.

IV. Industrial-commercial hybrids

This includes a primarily industrial facility (e.g., manufacturing or warehousing) but also integrates significant, high-quality office space.

V. Hotel-residential hybrids (condo-hotels)

These are privately owned housing units (condominiums), but they’re run and managed as part of a larger hotel chain.

This hybrid allows owners to use the unit for a portion of the year and rent it out as a hotel room for the rest. So, it serves as a personal asset with an investment opportunity.

Why you should invest in hybrid real estate

1. It offers a mix of residential and commercial spaces. So, it can provide diversified income streams.

2. It's a way to spread risk and potentially increase returns through rental income and property appreciation.

3. It can be located in vibrant areas with high demand. This makes it a potentially lucrative investment.

5. Land real estate

Land real estate (often called “real property” or “real estate”) is simply a parcel of land and everything permanently attached to it. Basically, a land property includes the ground itself and all natural or man-made structures permanently attached to it.

Land ownership extends to the earth's centre (including subsurface rights for minerals, oil, and gas) and the sky above it. (However, keep in mind that this is subject to legal limitations.)

Land is a huge market because you can invest in it for appreciation, development, or income generation through leasing or other uses, such as:

• Residential

• Commercial

• Industrial

• Agricultural

• Or special-purpose properties.

Examples of land real estate

Here are examples of land real estate:

• Vacant land

• Agricultural land

• Timberland

• Recreational land

• Raw land.

I. Vacant land

This includes undeveloped land in urban, suburban, or rural areas awaiting future development or investment.

II. Agricultural land

This includes land used for farming, ranching, or other agricultural purposes.

III. Timberland

This is land covered with forests, used for timber production or conservation.

IV. Recreational land

This is land used for recreational purposes, such as hunting, fishing, or camping.

V. Raw land

This includes unimproved land without infrastructure, utilities, or development.

Why you should invest in land real estate (land banking)

1. It’s a stable, tangible investment that appreciates over time, stores wealth, and provides a hedge against inflation.

2. It’s the basis for economic activity, since all production, housing, and commerce require a physical location on the land.

3. It offers a good source of income through rentals, leases, or resource extraction.

4. It's also a low-maintenance investment compared to properties that require building or renovation.

5. It’s the safest entry point with a lower initial cost than a finished building.

Ultimately, if you have smaller capital and are patient, land banking is ideal for you.

Bottom line

Understanding the types of real estate in Nigeria helps you choose the right investment opportunity. The 5 main property types to consider are residential, commercial, speciality, hybrid, and land.

For new investors, starting with simple, low-stress options such as land banking in verifiable locations or apartment rentals in high-demand middle-class locations is key.

Would you like me to find out about the typical rental yields for apartments in Enugu to help you compare with your budget?

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