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The short answer
A block of six two-bedroom flats in a mainland Lagos area such as Gbagada can cost well over ₦150 million to build before land, and in our worked example comes to ₦198 million including a 10% contingency. Against median asking rents of about ₦3 million per two-bed flat there (Ownkey, Q3 2026), that is a gross yield of about 9% on build cost, falling to roughly 5% net once land value and running costs are counted.
A block of flats is the classic diaspora property plan: build once, rent to several tenants, and have income in naira for family and for a future return. Run from the UK, it is also a project where costs move while you are not looking. This example walks through a full budget so you can see where the money goes and what the rent actually returns. The figures in the budget are an example only; the market prices quoted are from the sources named, with their dates.
What materials cost now
Materials make up a large share of any Lagos build, and they have moved quickly. Sources on recent prices:
| Item | Reported price | Source and date |
|---|---|---|
| Cement, 50kg bag (Dangote, BUA, HBM) | ₦12,000 per bag, with retail ranges up to about ₦15,000 | Legit.ng, 4 Sep 2026 |
| Sharp sand | ₦50,000 per ton | BusinessDay, 28 Sep 2025 |
| Granite | ₦60,000 per ton | BusinessDay, 28 Sep 2025 |
| 12mm iron rod, one length (Ojo market) | ₦9,500 local, ₦12,500 imported | BusinessDay, 28 Sep 2025 |
BusinessDay reported in July 2026, citing Fortren, that construction costs rose about 20% between December 2025 and May 2026. Treat any quote older than a few months as out of date and ask suppliers for today's price.
How one price moves the budget
Example. If the block uses 1,500 bags of cement at ₦13,500, cement alone costs ₦20,250,000. A 20% rise takes that to ₦24,300,000 before a single extra bag is bought. That is why the contingency line below is not optional.
A worked budget: six two-bedroom flats
Example only: a three-floor block of six two-bedroom flats on land already owned and titled in Gbagada. Get a quantity surveyor's bill of quantities for your own design.
| Stage (example) | Cost |
|---|---|
| Survey, soil test, drawings, approvals, professional fees | ₦8,000,000 |
| Foundation and substructure | ₦30,000,000 |
| Frame, blockwork and floor slabs | ₦60,000,000 |
| Roof | ₦12,000,000 |
| Plumbing, electrics, windows, doors, tiling, ceilings, paint | ₦55,000,000 |
| Fence, gate, borehole, soakaway, power backup | ₦15,000,000 |
| Subtotal | ₦180,000,000 |
| Contingency at 10% | ₦18,000,000 |
| Total build budget | ₦198,000,000 |
Approvals before the first block
Lagos now runs planning permits online. Nairametrics reported in July 2026 that the Lagos State Physical Planning Permit Authority moved all applications to its Electronic Planning Permit Processing System from 1 April 2026, so approvals can be applied for from anywhere. You will still need a registered architect and engineer, a survey plan and evidence of title. Check title before anything else: see checking a Lagos C of O from the UK.
What the rent returns
Ownkey's rent index for Q3 2026 (median asking rents on its own listings) puts two-bedroom flats at about ₦3.0 million a year in Gbagada, ₦3.2 million in Yaba and ₦3.25 million in Surulere.
| Line (example) | Amount a year |
|---|---|
| Gross rent: 6 flats × ₦3,000,000 | ₦18,000,000 |
| Allowance for empty periods, 5% | −₦900,000 |
| Management and repairs, 10% | −₦1,800,000 |
| Insurance and Land Use Charge (example) | −₦600,000 |
| Net rent | ₦14,700,000 |
- Gross yield on build cost: ₦18,000,000 ÷ ₦198,000,000 = about 9.1%.
- Net yield on build cost: ₦14,700,000 ÷ ₦198,000,000 = about 7.4%.
- If the land is worth ₦80,000,000 and you count it, total cost is ₦278,000,000: gross about 6.5%, net about 5.3%.
For comparison, Stears data reported by BusinessDay in July 2026 put Lagos rental yields in prime Island areas between about 3% and 6%. Mainland blocks can yield more on paper, but rent in naira loses value in pounds if the naira weakens; see currency risk on naira investments.
Where budgets usually go wrong
- Design changes mid-build. Adding a penthouse or moving walls after the frame is up costs far more than getting drawings right first.
- Materials bought too early or too late. Buying everything upfront ties up cash and invites theft; buying in small lots exposes you to every price rise. Agree a purchase plan with your quantity surveyor.
- Missing items. Soakaways, drainage, meters, and the cost of connecting to the grid are often left off early estimates.
- Time. A build that takes 30 months instead of 18 loses a year of rent: ₦18,000,000 in this example.
Controlling the build from the UK
- Pay in stages against work certified by your own engineer or quantity surveyor, not the contractor.
- Buy major materials yourself, or approve every purchase order, so prices and quantities are visible.
- Ask for dated photos and video at each stage, plus receipts for every purchase.
- Keep a running budget against the bill of quantities and review it monthly.
- Visit, or send someone independent, before releasing the larger payments.
Our Nigeria library covers the money side in more depth: building a house in Nigeria from abroad. Rental income is taxable in the UK if you are UK resident; see UK tax on Lagos rental income.
Where Pryme fits
A Pryme account holds pounds and naira together. Convert with Swap when a stage payment is due, with the rate and fee shown before you approve, then send naira to suppliers. Ask suppliers and your contractor for verifiable receipts through VerifyDoc.ai so you can check that a receipt is genuine and unaltered.
Questions people ask
How much does it cost to build a block of flats in Lagos?
It depends on design, area and current prices. In our worked example, six two-bedroom flats cost ₦198 million including a 10% contingency, before land. Get a quantity surveyor's estimate for your plans.
What is the price of cement in Lagos now?
Legit.ng reported ₦12,000 per 50kg bag from major makers in September 2026, with retail ranges up to about ₦15,000. Check suppliers for today's price.
Is a block of flats in Lagos a good investment?
In our example the net yield is about 7.4% on build cost, or about 5.3% if land value is included, in naira. Currency risk and running costs matter as much as rent.
Can I get a Lagos building permit online from the UK?
Nairametrics reported that Lagos moved planning permit applications fully online from 1 April 2026.
Sources
- Legit.ng: Fresh cement prices from Dangote, BUA and HBM (4 Sep 2026) · accessed Oct 2026
- BusinessDay: Cement, iron rod prices remain high despite inflation decline (28 Sep 2025) · accessed Oct 2026
- BusinessDay: Rental yields challenge assumptions on investment returns (16 Jul 2026) · accessed Oct 2026
- Ownkey: Nigeria rent index Q3 2026 (25 Jul 2026) · accessed Oct 2026
- Nairametrics: Lagos says building approvals can now be obtained online from anywhere (22 Jul 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.