Nigerians are increasingly shifting their daily shopping towards neighbourhood stores rather than traditional large-format retail outlets, as convenience and proximity become more important in consumer spending.

This is according to Knight Frank’s Africa Report 2026/27, which examines trends across Africa’s real estate markets.

The report, described as The Ultimate Guide to Africa’s Real Estate Markets, provides an overview of developments across key property sectors, including Nigeria’s office, residential, retail, and industrial and logistics markets.

What the report is saying

The report said there is a clear shift towards convenience-led and hyper-local retail formats in Nigeria, with neighbourhood-focused brands increasingly capturing daily essential spending within residential areas where consumer demand remains relatively resilient.

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It said brands such as Bokku Mart are benefiting from the trend, as consumers increasingly favour retailers located within residential catchments for everyday purchases.

  • “There is a clear shift towards convenience-led and hyper-local retail formats.”
  • “Neighbourhood-focused brands, including Bokku Mart, are outperforming traditional large-format retail by capturing daily essential spending within residential catchments, where consumer demand remains most resilient,” the report read.

The report linked the shift to changing consumer behaviour driven by income constraints, mobility considerations and the preference for proximity.

It said the trend is creating opportunities for neighbourhood-focused retailers, while traditional large-format retail faces a more selective consumer environment.

Prime retail rents in Nigeria currently average about US$25 per square metre per month, while retail yields stand at approximately 9.50%, according to the report.

The report also noted continued international interest in Nigeria’s retail market, citing the entry of Sinomart International at Lekki Palms Mall as an example of foreign retailers targeting selected and cost-efficient retail opportunities.

Nigeria’s wider real estate market

Nigeria’s real estate market is experiencing changing demand patterns across retail, office, residential and industrial property as consumers and businesses respond to higher costs and changing economic conditions.

In the office market, the report said Lagos remains tenant-led, with prime office rents averaging about US$55 per square metre per month.

  • Landlords are prioritising occupancy over headline rents by offering rent concessions, flexible lease structures and incentive packages to secure tenants.
  • Occupiers are becoming more selective, with demand increasingly focused on well-located and operationally efficient buildings.
  • Decentralised submarkets such as Ikeja are gaining traction because of lower occupancy costs and improved accessibility.
  • In the residential market, tenants are increasingly prioritising affordability over location, resulting in migration towards peri-urban and more affordable areas.

The report said demand is also shifting towards smaller and more efficient housing types, including studio and one-bedroom apartments, as households respond to economic pressures.

Get up to speed

Nigeria’s construction costs rose by 20% between December 2025 and May 2026, adding to cost pressures across the real estate market and potentially further constraining property affordability.

  • The finding was disclosed in a report by Fortren & Company. The report attributed the increase to rising building material and energy costs, as well as supply chain and freight disruptions linked to the escalating Iran-Israel conflict.
  • It said Nigeria was among the affected markets due to its reliance on imported cement, steel and finishing materials, as well as diesel-powered construction activities.
  • Cement, steel and finishing materials recorded some of the sharpest increases, prompting developers and contractors to adopt indexed pricing, renegotiate agreements, delay projects or scale back specifications as project costs rose.

The report said rising construction costs are beginning to influence broader real estate pricing, with implications for rents, affordability and investment yields across major urban markets.

What you should know

Nairametrics earlier reported thatNigeria’s real estate sector is entering a consolidation phase as high interest rates, elevated construction costs and limited access to structured finance continue to reshape developer activity.

  • This was contained in the Real Estate 2026 Outlook report by the Managing Director of Legendary Foreshore, Victor Ameh, which examined property market trends across Nigeria and Ghana.
  • The report said 2026 would mark a shift towards more disciplined development, with well-capitalised developers expected to have an advantage as high financing and construction costs put pressure on weaker projects.
  • It also noted that Nigeria’s estimated $15 billion real estate market has very low mortgage penetration, leaving many developments dependent on equity, short-term capital and informal funding structures.

These pressures are feeding into the affordability challenges identified by Knight Frank, as developers face higher costs while households and businesses become increasingly sensitive to rents and operating expenses.