KEY POINTS

• Lagos’s short-let market generated N281 billion in revenue in 2025, below the N300 billion projection.
• Lekki Phase I and II combined for nearly N165 billion while Banana Island dropped to N9 billion.
• Revenue is projected to grow marginally to N285.5 billion in 2026 as the market matures.

The Lagos short-let market held its ground in 2025, generating an estimated N281 billion in revenue, but tighter competition, stricter estate regulations, and a widening gap between professionally managed properties and those that are not have ended the sector’s era of fast, unregulated expansion.

The Lagos short-let market 2025 figures, contained in the Lagos Shortlet Market Report by Edala Development, fell short of the N300 billion projection made in the firm’s 2024 outlook. Co-Founder and CEO Temidayo Oloyede attributed the shortfall to a maturing market where demand remains solid but rapid supply growth has made it harder for individual properties to sustain high occupancy levels.

“The rapid increase in supply is making it more difficult for every property to maintain high occupancy levels,” Oloyede said. Revenue is projected to rise modestly to N285.5 billion in 2026 as the market stabilises around more professional operating standards.

Lekki dominates, Banana Island collapses

The Lagos short-let market 2025 geography tells a story of concentration and disruption. Lekki Phase I and II together generated nearly N165 billion, cementing their position as the city’s short-let engine. Victoria Island followed with revenue that nearly doubled to N34.8 billion, reflecting strong corporate and leisure demand in the central business corridor.

Banana Island moved in the opposite direction, crashing to N9 billion after regulatory suspensions restricted short-let activity there. Projections point to a further collapse to N1.5 billion in 2026 as authorities completed a full suspension of short-let operations on the island as of February 2026. Surulere also saw a revenue dip to N6.15 billion.

Mainland Lagos emerging as next frontier

With island markets tightening under regulation and rising competition, the report identifies Ikeja, Yaba, and Gbagada on the mainland as the next growth corridor for short-let investors. Revenue in those areas has grown steadily and supply remains considerably less saturated than the traditional island zones.

Infrastructure development is adding to the investment case. The Lagos-Calabar Coastal Highway reached 47 kilometres of completed and temporarily opened road during 2025, the Green Line Rail Project linking Marina to Lekki advanced to planning and preliminary works, and the Lagos State Government launched the €410 million Omi Eko Project to expand inland waterway transportation.

The report framed these projects as structural support for the sector’s long-term demand, noting that Lagos now hosts more than 200 international events during the festive season alone and attracted over 1.2 million tourists who increasingly seek premium short-term residences.