Increase in commercial activities raises property rents in Aba
By Yolamchi Ukaga, Aba
Aba, a commercial city saw an upsurge in rental value of commercial accommodation, such as warehouses and shops in 2017/2019, as a result of increase in commercial activities in the area, especially imported textile materials.
Rent for warehouses rose from N300,000 to N600,000 per annum, while shops went up from N200,000 per annum to N300,000 per annum.
According to Francis Ikemefuna, an Aba-based real estate consultant, expansion of the market and inflow of patrons from all over the country, especially the northern part of the country to Aba, pushed property owners at the city centre (crown areas) to convert most of their facilities from residential to commercial purposes.
This development led to the relocation of residents from the core city centre, to sub-urban areas with increase in demand for accommodation, Ikemefuna, affirmed. With this, it was evident that an average rent at the sub-urban areas, rose from N120,000/N144,000 to N180,000 N240,000, depending on the area.
However, during the lock-down occasioned by COVID-19 pandemic, the real estate sector saw loss of economic value.
Some importers and traders ran short of cash, while some failed short in their bank loan repayment. Consequently, their only option was to effect rent increase. With the current situation, most of the tenants are unable to afford the increased rent. Some are going down to smaller accommodations, while others are going deep into the sub-urban areas in search of cheap accommodation.
To address the situation, Ikemefuna urged government to invest in low-cost housing scheme, nationwide to provide cheap and convenient accommodation for the people.
This is as he also urged government to subsidize or regulate the cost of building materials, especially cement, which is going out of the reach of the common man. He also observed that provision of good road network to link the local areas with the cities, would reduce pressure on the cities, as most people can operate from the sub-urban areas, noting that high cost of transportation, occasioned by bad roads, influences people to prefer to be in the urban areas.