An Analytical Study of the Relationship Between Land Tenure Security and Investment in Commercial Real Estate in Lagos State

Land tenure insecurity in Lagos State, arising from competing customary land rights, government revocation, and adverse possession vulnerabilities, has been identified as a significant barrier to commercial real estate investment, yet analytical legal-economic evidence on this relationship in the Nigerian context is limited. This study analyses the relationship between land tenure security indicators and commercial real estate investment levels in Lagos State using a mixed legal-economic methodology. Legal tenure security was measured using a composite index incorporating title registration status, adjudication risk assessment, and historical revocation exposure for 200 commercial property transactions completed between 2019 and 2023. Investment variables including loan-to-value ratios, transaction premiums, and development commencement periods were analysed. Structured interviews with 20 real estate lawyers and 15 commercial property financiers were conducted. Results indicate that properties with registered title certificates attract loan-to-value ratios 18 percentage points higher than unregistered land rights holdings. Transaction premiums for fully perfected titles are 22 to 31 percent above equivalent unregistered properties. Development timelines are significantly shorter for securitised titles. The study fills an analytical gap in Nigerian land tenure-investment research and concludes that the Land Use Act consent regime materially increases tenure insecurity through revocation risk and recommends removal of consent requirements for commercial leasehold interests and an accelerated cadastral mapping programme for the Lagos metropolitan area.

Keywords: land tenure security, commercial real estate, Land Use Act, Lagos State, investment