Challenges of International Investment in Real Property Portfolio in Nigeria

Abstract

A real estate portfolio enables investors to diversify their investments and mitigate risk, thereby achieving consistent income through rental yields, property value increases, and various investment returns. It presents opportunities for long-term wealth accumulation and financial stability. Moreso, a foreign investor who is looking to invest in Nigeria has these goals in mind, with an understanding that an effectively managed portfolio can improve cash flow and provide tax advantages. This paper investigates the challenges associated with international investment in Nigeria's real estate sector, which is important for economic advancement yet presents numerous challenges for foreign investors. The study introduces both global and local perspectives and outlines the nature of international real estate investments and their importance to Nigeria's economy. It identifies and analyses the primary challenges encountered by international investors, including economic factors such as inflation and currency fluctuations, legal and regulatory challenges like land tenure issues, and political instability characterised by policy changes and corruption. Additionally, the paper addresses cultural and social hurdles, such as language differences and local perceptions of foreign investment, along with infrastructural shortcomings, including inadequate urban planning and insufficient facilities. It was recommended that reforms should aim to stabilise the economy, enhance legal clarity, promote political stability, and improve infrastructure. The conclusion highlights the necessity for a comprehensive strategy to attract and retain international investors, detailing measures to alleviate challenges and create a favourable environment for real estate development in Nigeria.