October 22, (THEWILL) – The Nigerian real estate sector is strategically partnering with the entertainment industry to advance economic development.
Often referred to as the ‘Giant of Africa’, Nigeria is known for its vibrant entertainment industry and fast-growing real estate sector. These two seemingly unrelated sectors have developed a fascinating and mutually beneficial relationship over the years with potential of achieving the much-desired diversification.
In recent times, operators in the real estate space have announced various initiatives aimed at partnering with key players in the entertainment industry to boost gross domestic product (GDP). Although the results have been slow, there is steady progress among the sectors.
The recent GDP report by the National Bureau of Statistics (NBS) showed that the real estate services sector recorded a real GDP growth of 1.87 percent in the second quarter of 2023. This is lower than the growth achieved in the second quarter of 2022 by 2.54 per cent points, but higher by 0.17 per cent points relative to Q1 2023. On a quarter-on-quarter basis, the sector grew by -0.57 per cent in the second quarter of 2023.
It contributed 5.29 per cent to real GDP in Q2 2023, lower than the 5.33 per cent it recorded in the corresponding quarter of 2022. This reflects the general lull in the economy during the period arising from various macroeconomic headwinds.
Similarly, in real terms, the entertainment sector grew by 2.54 per cent year-on-year, which was higher than the rate recorded in
Q2 2022 by 2.43 per cent points, but lower by 2.93 per cent points when compared with that of the preceding quarter. Quarter-on-quarter, growth stood at -33.08 per cent in real terms. “Overall, Art, Entertainment and Recreation contributed 0.21 per cent to real GDP in Q2 2023, relatively the same with the 0.21 per cent recorded in the same quarter of 2022 and lower than the 0.31 per cent recorded in the first quarter of 2023”, the NBS report stated.
Entertainment industry boom
The Nigerian entertainment industry, particularly Nollywood (Nigerian film players) and the music scene, has seen remarkable growth and enjoyed international recognition in recent years. The global appeal of Nigerian movies, Afrobeat music, and a plethora of talented artists has brought unprecedented attention to the country’s cultural exports.
Entertainment hubs like Lagos, Abuja and Port Harcourt have become epicenters of creativity, works of cartoonists, producers and enthusiasts from around the world. The constant influx of people seeking opportunity and experience has greatly increased the demand for housing and commercial space in these cities.
Real estate investment
Nigeria’s entertainment boom has fueled real estate investment in and around entertainment hubs. Real estate developers are realising the potential of these areas and are building luxury apartments, studios and event venues to meet the needs of the entertainment industry. The demand for real estate in entertainment hotspots has caused real estate values to skyrocket. Investors are eager to capitalise on the rental market, which is robust with frequent visits from professionals and tourists.
Some areas in Lagos, for example, have been transformed into designated entertainment districts that offer a unique mix of cultural experiences. With nightclubs, theaters and restaurants, these neighborhoods are revitalizing previously neglected neighborhoods and raising the profile of their properties.
As the entertainment industry flourishes, the government and private entities invest in improving infrastructure such as roads, security and public services in these areas. This in turn improves the overall livability and appeal of these regions and attracts more property development.
Celebrities and real estate
Nigerian entertainers, including musicians, actors and comedians, often invest in real estate to secure their wealth and contribute to the growth of the industry. High-profile celebrities have become involved in residential property development, hotel ownership and real estate agencies, further promoting the connection between the two industries.
For example, renowned musicians like Davido and Wizkid along with actors like Genevieve Nnaji have diversified their portfolios by investing in real estate ventures. Their importance and recommendations draw attention to specific real estate projects and locations, which ultimately increases the value of real estate.
One of the significant knock-on effects of the close relationship between the entertainment industry and real estate is the strengthening of Nigeria’s tourism sector. The country has become a destination for tourists who want to experience a vibrant culture, music and film scene. Tourists visiting Nigeria often require accommodation, stimulating the growth of the hospitality sector, including hotels, resorts and short-term rentals. The proximity of these accommodation options to entertainment venues further enhances the overall visitor experience.
The synergy between real estate and the entertainment industry has pushed developers to think creatively. Responding to the unique needs of this sector, developers are designing properties to meet the demands of artists, producers and entertainers. These spaces often include state-of-the-art recording studios, soundproof rooms, and equipment to facilitate video production. Such niche real estate offerings are testament to the adaptability of the real estate industry.
Role of technology
The advent of technology has played a vital role in bridging the gap between the real estate and entertainment sectors. Online platforms and apps now make it easier for artists to book short-term accommodation, while real estate agents can more easily connect with potential buyers, sellers or tenants. Virtual tours and augmented reality tools also help showcase properties to domestic and international clients, further highlighting the connection between technology, real estate and the entertainment industry.
As the world becomes more environmentally friendly, sustainable real estate development in Nigeria is gaining momentum. Many entertainments center real estate projects are now prioritizing energy efficiency, green building practices and environmentally friendly design. The intersection of sustainability and the entertainment industry reflects a commitment to responsible development that aligns with global trends.
Challenges, Opportunities
While the symbiotic relationship between real estate and the Nigerian entertainment world has brought many opportunities, it also presents challenges. For example, competition for the best real estate locations has led to skyrocketing property prices, making it difficult for many Nigerians to afford houses in desirable areas. The government and stakeholders must strike a balance to ensure sustainable growth and equitable development.
In conclusion, the synergy between real estate and the Nigerian entertainment world is a dynamic and evolving partnership that continues to shape the landscape of the country. Not only has it attracted local and international investment, it has also strengthened the nation’s global cultural influence. This mutually beneficial relationship serves as a model for other countries and shows the potential of two seemingly unrelated industries to flourish through collaboration. As both sectors continue to grow and adapt, the future of Nigerian entertainment and real estate will be even more interconnected and promising.
*** Lanre Adeyinka Taiwo an Estate Valuer, is Managing Partner at Taiwo Taiwo Associates.*
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