Is Victoria Island property investment still profitable?

Authored by the expert who managed and guided the team behind the Nigeria Property Pack

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THE AFRICANVESTOR

A team specialized in real estate investing in African countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Nigeria. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At The AfricanVestor, we explore the Nigerian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Lagos, Abuja, and Port Harcourt. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are the current average property prices per square meter on Victoria Island compared to three and five years ago?

As of September 2025, Victoria Island property prices per square meter range from ₦1.2 million to ₦1.5 million for standard locations, while prime areas like Oniru, Adeola Odeku, and Eko Atlantic command ₦1.5 million to ₦3.7 million per square meter.

Compared to 2022, when average prices ranged from ₦950,000 to ₦1.1 million per square meter, current prices represent a 26-36% increase over three years. Luxury locations that were above ₦1.8 million per square meter in 2022 have now reached the ₦3.7 million ceiling in prime developments.

The five-year comparison shows even more dramatic appreciation, with 2020 prices averaging ₦800,000 to ₦950,000 per square meter. This translates to total price growth of approximately 30-60% over the five-year period, with the sharpest increases occurring in luxury and commercial segments.

Prime waterfront properties and new developments in Eko Atlantic have experienced the steepest appreciation, with some luxury units seeing price increases of up to 60% since 2020. Commercial properties have similarly benefited from this upward trend, particularly Grade A office spaces in the central business district.

It's something we develop in our Nigeria property pack.

How much rental income can landlords realistically expect today for 2-bedroom, 3-bedroom, and luxury apartments on Victoria Island?

Two-bedroom standard apartments on Victoria Island generate monthly rental income between ₦2 million and ₦5 million, with most properties achieving ₦2 million to ₦3 million per month depending on location and amenities.

Three-bedroom luxury apartments command significantly higher rents, with annual income ranging from ₦15 million to ₦35 million, translating to monthly rents between ₦1.2 million and ₦2.9 million. These properties typically feature premium finishes, 24/7 security, backup power, and access to recreational facilities.

Short-let apartments represent the highest income potential, with well-positioned units earning ₦2.5 million or more per month. These properties benefit from Lagos's growing business tourism and expatriate demand, though they require more active management and typically achieve 60-85% occupancy rates during prime periods.

Luxury penthouses and waterfront properties in prime locations like Banana Island extension areas of Victoria Island can command even higher premiums, with some units achieving monthly rents exceeding ₦4 million for short-let operations.

What is the current rental yield percentage for properties in different parts of Victoria Island?

Victoria Island rental yields currently average 6-8% across the district, with variation depending on property type, location, and management strategy.

Standard residential properties in central Victoria Island areas typically achieve rental yields between 6-7%, while luxury apartments in prime locations like Oniru and Adeola Odeku can reach 7-8% annually. These yields reflect the strong demand from expatriates and high-income local professionals.

Short-let operations deliver the highest yields, ranging from 8-10% for well-managed properties in optimal locations. However, these returns require active management, higher service costs, and carry occupancy risk that can impact overall profitability.

Commercial properties in Grade A office buildings maintain yields around 6-8%, though some buildings face pressure from oversupply in certain segments. Mixed-use developments combining residential and commercial elements often achieve yields at the higher end of the range due to diversified income streams.

The best-positioned assets with premium amenities, strategic locations, and professional management can achieve yields approaching 10%, making Victoria Island one of the most attractive rental markets in West Africa.

How has property demand on Victoria Island shifted in the past two years, particularly for residential versus commercial use?

Residential demand on Victoria Island has strengthened significantly over the past two years, with particular growth in luxury and serviced apartment segments driven by increased expatriate presence and local professionals seeking premium accommodations.

The demand shift shows clear preference for residential luxury units and short-let properties, as remote work trends and business travel recovery have increased demand for flexible, high-quality housing options. Expatriate families and business travelers particularly seek furnished apartments with reliable power and security.

Commercial demand has become more selective, with oversupply forming in some Grade B and C office segments while Grade A spaces maintain strong occupancy. Companies increasingly favor modern buildings with backup power, high-speed internet, and flexible workspace configurations.

Short-let operators have become major demand drivers, converting traditional rental apartments into Airbnb-style accommodations to capture higher yields from business travelers and visiting professionals. This trend has intensified competition for prime residential units.

The two-year trend indicates sustained residential strength while commercial demand has stabilized at current levels, with new supply potentially creating temporary pressure in certain office segments.

What are the main drivers of demand right now—expatriates, local professionals, companies, or short-let operators?

Expatriates remain the primary demand driver for Victoria Island properties, particularly seeking luxury apartments and serviced accommodations with international-standard amenities, reliable infrastructure, and proximity to business districts.

Local professionals represent the second-largest demand segment, with high-income Nigerians choosing Victoria Island for its prestige, security, and convenient access to major financial and business centers across Lagos.

Short-let operators have emerged as significant demand drivers, actively acquiring and converting properties to capture the growing business tourism and short-term accommodation market. These operators target properties suitable for Airbnb and corporate housing, driving up competition for well-located units.

Multinational companies continue driving demand for both residential and commercial properties, requiring housing for expatriate staff and modern office spaces for their Lagos operations. Oil and gas companies, financial institutions, and technology firms particularly influence this segment.

Corporate housing providers also contribute substantially to demand, as companies increasingly prefer managed accommodation solutions for visiting executives and project teams rather than traditional hotel arrangements.

What is the current occupancy rate for residential apartments and commercial offices on Victoria Island?

Residential apartments on Victoria Island maintain exceptionally high occupancy rates of 95-99% across luxury, serviced, and standard unit categories, reflecting the area's desirability and limited quality housing supply.

Commercial office occupancy stands at approximately 86% for Grade A prime buildings, though this varies by specific location and building quality. Some newer developments and Grade B/C properties experience lower occupancy as supply increases in certain segments.

Short-let properties typically achieve 60-85% occupancy during prime business periods, with seasonal variation affecting overall annual occupancy. Well-managed short-let units in optimal locations consistently achieve occupancy rates at the higher end of this range.

Luxury residential buildings with premium amenities like 24/7 security, backup power, swimming pools, and gyms maintain occupancy rates closer to 99%, as these properties attract stable, long-term tenants willing to pay premium rents.

The high occupancy rates across residential segments demonstrate Victoria Island's continued attractiveness to quality tenants, while commercial occupancy reflects selective demand in an increasingly competitive office market.

How do current service charges, levies, and maintenance costs on Victoria Island properties impact profitability?

Annual service charges on luxury estates range from ₦800,000 to ₦1.5 million, translating to ₦65,000 to ₦130,000 monthly depending on amenities like 24/7 security, backup power, swimming pools, gyms, and concierge services.

Maintenance costs for short-let or serviced units typically range from ₦100,000 to ₦400,000 monthly excluding utilities, while utility bills add another ₦250,000 to ₦700,000 monthly depending on usage patterns and power consumption.

Combined service charges, levies, and maintenance costs average 8-15% of gross rental income, directly impacting net yields for property investors. Premium buildings with extensive amenities tend toward the higher end of this range.

Properties targeting short-let markets face higher maintenance costs due to increased turnover, cleaning requirements, and amenity usage, but these costs are typically offset by higher rental income potential.

It's something we develop in our Nigeria property pack.

What major infrastructure projects or government policies are planned or ongoing that could affect Victoria Island property values in the next 3-5 years?

Harbour Point Towers, a major 20,000 square meter development scheduled for completion in 2025, will add significant Grade A office space and luxury residential units to Victoria Island's inventory, potentially impacting supply dynamics.

RCO Court Tower, planned for completion in 2027, represents another substantial addition to the commercial real estate landscape, while advanced infrastructure development in Eko Atlantic continues expanding the area's premium property offerings.

Recent launches like Ibom Tower signal ongoing urban development momentum for Victoria Island, attracting further luxury investment and potentially driving property values higher through improved infrastructure and prestige.

Government initiatives on urban renewal and flood protection remain mixed in execution, though regulatory changes affecting land use and building codes continue evolving, particularly for short-let operations which face increasing oversight.

The Lagos State government's focus on improving transportation infrastructure, including road improvements and traffic management systems, should enhance Victoria Island's accessibility and attractiveness for both residential and commercial development.

How accessible is financing for property buyers on Victoria Island today, and what are the prevailing mortgage rates?

Financing remains accessible for well-qualified buyers, particularly expatriates and corporate clients with strong financial credentials, though local buyers face relatively high mortgage rates typically ranging from 14-19% per annum.

Banks maintain strict eligibility criteria for property financing, requiring substantial down payments, proof of stable income, and comprehensive financial documentation. International buyers often find it easier to secure financing through specialized lenders.

Foreign currency loans are available for prime buyers, but naira volatility adds significant risk and limits favorable terms for local investors seeking long-term financing. Dollar-denominated loans typically offer better rates but carry currency risk.

Commercial property financing faces similar challenges, with lenders requiring higher equity contributions and shorter repayment terms compared to residential mortgages. Interest rates for commercial properties typically exceed residential rates by 2-4 percentage points.

Alternative financing through private lenders and investment groups has become more common, though these options typically carry higher costs and shorter terms than traditional bank financing.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Nigeria versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What risks are investors facing now—such as flooding, regulatory changes, currency volatility, or oversupply—and how are these being managed?

Flooding remains a persistent risk for certain low-lying areas of Victoria Island, though recent infrastructure improvements have mitigated some vulnerability. Investors increasingly prioritize properties in elevated locations or buildings with flood protection measures.

Regulatory changes pose ongoing challenges, particularly as Lagos State tightens short-let regulations and building codes. Recent enforcement actions have targeted irregular developments, making compliance verification essential for property investments.

Currency volatility creates significant risk for dollar-based investors, with naira fluctuations affecting both property values and rental income when converted to foreign currency. Rental indexation and dollar-denominated leases have become common hedging strategies.

Commercial sector oversupply presents moderate risk, especially in Grade B and C office spaces where increased supply creates pricing pressure. Investors are shifting focus to Grade A properties and mixed-use developments to maintain competitive positioning.

Risk management strategies include selecting well-maintained buildings with professional management, comprehensive insurance coverage, and increasingly shifting to short-let models for higher ROI potential despite operational complexity.

How does Victoria Island compare to nearby investment hotspots like Lekki Phase 1, Ikoyi, and Banana Island in terms of ROI and liquidity?

Location	Average Price per sqm	Rental Yield (%)	ROI Trend	Liquidity Level
Victoria Island	₦1.2M - ₦3.7M	6-8%	High, sustained	Very high
Lekki Phase 1	₦800K - ₦1.5M	7-10%	Strong growth	High
Ikoyi	₦1.5M - ₦3.9M	6-8%	Highest for luxury	High
Banana Island	₦2M - ₦4M	6-7%	Most stable	Highest
Eko Atlantic	₦2.5M - ₦4.5M	5-7%	Emerging premium	Moderate

What exit strategies are most effective for investors on Victoria Island right now—quick flips, long-term rentals, or short-let management?

Short-let management currently offers the highest cash flow and flexibility for Victoria Island properties, particularly in prime locations with strong business travel demand and tourist appeal.

Long-term rentals provide stable, predictable income with lower management requirements, making them ideal for investors seeking passive income from luxury apartments targeting expatriate or corporate tenants.

Quick flips work selectively for new luxury units, though the strongest price appreciation typically occurs during off-plan and pre-completion phases rather than after project completion.

Mixed strategies combining long-term corporate leases with periodic short-let availability offer balanced risk and return profiles, allowing investors to capture both stable base income and higher yield opportunities.

It's something we develop in our Nigeria property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Average Price per Square Meter Nigeria
2. Average Property Price Lagos Nigeria
3. Nigeria Property Centre - Victoria Island Rentals
4. Nigeria Property Centre - Victoria Island Houses
5. Lagos Nigeria Real Estate Trends
6. Lagos Nigeria Property Analysis
7. Average Rent Lagos Nigeria
8. TPS Lagos City Report H1 2025
9. Average Rental Yield Nigeria
10. Service Charge Analysis Lagos