Navigating through opaque land laws, corruption, a lack of development expertise and financing, a dearth of mortgages and high building costs will take courage and influential local partners.

"There are sizeable challenges to overcome but in many ways Nigeria represents the perfect storm for real estate investment; huge population, rapid urbanisation and a growing middle class," said Michael Chu'di Ejekam, Director of Nigerian Real Estate at Actis, a London-based private equity firm.

Actis has US$5.2 billion under management, including two sub-Saharan Africa real estate equity funds totalling US$434 million, which it says are attracting US and European investors.

Nigeria's population of nearly 170 million is bigger than Russia's and its economy is growing at 6 per cent, a combination which is producing a new wave of property buyers from bankers and airline staff to mobile phone and fast food shop owners.

"I see demand from the middle-class higher than ever before," said Deolu Dara, associate vice-president at Nigeria-based Avante Property Asset Management, which manages several multimillion-dollar residential projects in Lagos.

A successful real estate investment in Nigeria can earn returns as high as 30-35 per cent, while rental income yields in cities such as Lagos and Abuja can easily reach 10 per cent, developers and estate agents say.

Property in Lagos, a heaving metropolis of around 20 million people, can be among the most expensive in the world, with two-bedroom flats costing more than US$1 million in upmarket areas.

However, the top-end range is dominated by well-established players, and developers should target middle-income workers in major cities, such Lagos, Abuja and the oil-hub Port Harcourt. The most popular units fall in a price bracket of 20-35 million naira (HK$950,000-HK$1.7 million), developers and estate agents say.

Nigeria's middle class make up around 23 per cent of the population and earn around 80,000- 100,000 naira per month, according to a report by investment bank Renaissance Capital.

In smaller cities and rural areas, a lack of information about land and regulation is off-putting, while a violent Islamist insurgency has made the north of Nigeria unattractive, despite huge unmet demand in cities such as Kano and Kaduna.

The majority of Nigerians live in poverty in shanty towns or in basic concrete block and iron-roofed houses they have built themselves, but building mass housing for the poor is not a popular investment.

"If you know the market, the people, focus on middle class and cherry pick your deals, you can clean [up]," added Dara, who said Africa's biggest oil and gas industry is also driving demand. One foreign oil major bought 300 flats recently.

Nigeria's construction and real estate sectors are growing at more than 10 and 12 per cent respectively, a boon for foreign and Nigerian construction firms, including UPDC, Cappa D'Alberto and Julius Berger.

Yet there is still not enough good-quality affordable housing because business is frustrated by widespread corruption, poor state infrastructure and a lack of expertise and financing.

London-based agent Jones Lang LaSalle ranks Nigeria 96th out of 97 on its transparency index, just in front of Sudan but behind six other African countries.

Having support from powerful politicians or business magnates will help to avoid terminal financial pitfalls.

"It's a business that requires local partners and local knowledge or you'll run into problems," Dara at Avante says.

Avante's chairman is Wale Tinubu, the head of oil and gas firm Oando and a close relative of former Lagos state governor Bola Tinubu, who still wields influence there.

London-based Actis has given directorships to Nigerian energy firm Seven Energy and local conglomerate UAC.

"In places like America you seem to be able to buy property without a stress but it just isn't like that here," said Ike Ejekam, 31, who is about to buy a newly built two-bedroom apartment for 20 million naira on the Lagos peninsula.

Ejekam represents the new breed of buyers who expect well-built housing with all the modern conveniences. He works at a branch of a local bank and is using his life savings and funds borrowed from family members to buy his property outright.

"I don't like to think about mortgages because it scares me when I see how difficult it is for my friends to get a loan."

Nigerian banks don't like giving out mortgages because reliable information about buyers and land is scarce, while there is no secondary market to offset the risks.

The government says it is trying to fix this by securing a US$300 million loan from the World Bank to establish a mortgage refinancing company, which should free up some bank lending.