Africa's cities are running out of land, prompting a real-estate
developer here to erect what might be Africa's ritziest district on a
beach long known as a haven for day laborers and beer tipplers.
The shacks that crowded the shoreline called Bar Beach are gone,
replaced by construction tents. Families who squatted here were evicted.
For the past four years, a Lebanese-Nigerian property developer has
hosed sand into the ocean, creating new land for planned jogging paths,
yacht jetties and condominiums with helipads for 250,000 opulent
Nigerians.
The new Eko Atlantic township is emblematic of a booming business in
Africa in which developers build walled-off cities for the very rich on a
continent that is still the world's poorest.
Developer Gilbert Chagoury, founder of Nigeria's Chagoury Group, is
the epitome of Africa's moneyed class: Aside from a friendship with Bill
Clinton, whose 1996 presidential campaign he helped fund, Mr. Chagoury
boasts an ambassadorship from St. Lucia to the Vatican and a gallery in
the Louvre named after him and his wife, both contributors.
Flush with funding from French banks that are enticed by Africa's
rapid growth, the 67-year-old Mr. Chagoury is aiming to cap his career
with the most colossal real-estate project in West Africa.
"This is going to be the equivalent of Champs Élysées in Paris or
Fifth Avenue in New York," says David Frame, managing director of South
EnergX, a construction unit of Chagoury Group. He was standing on a
gravel road that will be paved into an eight-lane boulevard, ending at a
gated exit into the rest of Lagos.
Africa has the world's fastest-growing cities, according to the
United Nations. Its current urban population of 450 million is expected
to triple in the next four decades.
As vacant land vanishes in African cities, foreign investors are
responding with the creation of new cities out of forests, grasslands
and landfill. Investors expect to wring big profits from offering
Africa's wealthy places to live, work and shop away from the crumbling
infrastructure and squalor of old cities.
But those projects have come under fire from critics who point out
that they will in no way alleviate the housing crisis hitting the
majority of the population. In Lagos, few will be able to afford Eko
Atlantic's glass tower condos.
Meanwhile, some of these gargantuan projects are struggling.
Renaissance Capital Financial Holdings Ltd. of Moscow plans to build a
city for 62,000 people on a coffee farm outside Nairobi, Kenya, and a
similar-size project on a pepper field near Ghana's capital of Accra.
The coffee farm in Kenya is still just that, as Renaissance works out
a dispute with shareholders. The project in Ghana is mired in a
disagreement between local chiefs over who owns the pepper field.
China International Trust and Investment Corp. built a $3.5 billion
city for 500,000 people near Angola's capital, Luanda. The suburb opened
in 2011 but remains a ghost town, as the government strains to sell the
$200,000 condos to a population whose per-capita income is $6,000 a
year.
Mr. Chagoury hopes that Eko Atlantic will be different. Project
executives point to Lagos's population of oil-rich elites, which is both
larger than that of Luanda's and readier to pay top dollar for clean
streets and modern infrastructure. They decline to say how much Eko
Atlantic will cost, other to say it will be "in the billions" of
dollars.
Their city, Lagos, is crowded and chaotic. Its population grows by
nine people every 10 minutes, according to the U.N., which estimates
that Lagos has 11 million people and is the world's fastest-growing
megacity. The Nigerian government puts the city's total population at 21
million.
Even in posh neighborhoods, sewage bubbles up from open ditches. For
want of office towers, hundreds of companies squeeze their headquarters
into moldy midcentury ranch houses. At lunch, many companies turn off
their lights to rest chugging electric generators. To escape choking
traffic, many elites commute by helicopter or yacht.
What little housing there is for Nigeria's growing middle class is
pricey. Average rent on a three-bedroom apartment in downtown Lagos is
$3,624 a month, according to Dubai-based research firm Reidin. Landlords
usually expect two years of rent in advance, preferably paid in U.S.
dollars. It is a challenge for Nigeria's middle class, whose income
averages about $600 a month, according to Renaissance Capital.
Buying is just as tough. City records on land ownership are a mess,
stockpiled or missing. Swindles involving forged titles and the
fraudulent sale of villas are common.
Home loans come with double-digit interest rates. In a country of 167
million people, there are only 20,000 mortgages, according to Nigeria's
finance minister, Ngozi Okonjo-Iweala.
To keep pace, construction activity expands by 13% a year, according
to government statistics. Architect Ade Laoye estimates that Lagos needs
at least needs 10,000 additional houses a year.
"We don't have the architects, electricians, bricklayers, engineers, the builders," Mr. Laoye says.
One person who does have resources is Mr. Chagoury, a Nigerian-born
construction magnate. He got his first taste of city-making in the
1990s, when the government hired him to construct a small banana-shaped
peninsula now dotted with million-dollar homes.
In 2003, Lagos's government approached Mr. Chagoury with a problem.
Waves were crashing over Bar Beach, washing away some of the drug scene,
but also flooding shore-side avenues and wetting the lobbies of
important Nigerian companies.
He returned with an offer to build a sea wall without charge. In
return, Lagos's government allowed his company to dredge sand from the
bottom of the Atlantic Ocean—and shoot it out of a hose to create 3.9
square miles of beach.
The square mile poured so far is a panorama of sand, resembling the
Sahara. Manhole covers pop up several feet above the dunes as the
skeletal beginnings of a drainage system. Near the ocean, cranes drop
X-shaped blocks to make a sea wall.
Mr. Chagoury declined requests for an interview. But project
executives say that they already have sold all but two of the several
dozen building sites on the sandlot. Buyers plan an international
school, high-rise condos, spas, headquarters for several oil companies, a
conference center shaped like the sails of a boat and a U-shaped office
tower called Unity.
Lower-end developers worry such endeavors will inflate the cost of
building materials for years to come. An already stretched supply of
bricklayers and cement mixers will leave to work here.
Developers like Michel El Chemor are unapologetic about catering to
the top end of Nigeria's property market. He bought a plot from Mr.
Chagoury for the site's first skyscraper: a $50 million, 24-story condo
called Eko Pearl. It will peer out over a marina—and the smog and
skyline of Lagos.
"I'm sorry to say, but it's chaos in Lagos," he says. "They're going
to need to destroy what they had before and rebuild it, which will take a
long time."
Wall Street Journal
Related story:
Nigeria's growing middle class
