Determined to offer unrivalled local expertise and global market knowledge with sole aim of maximizing customers’ property potential; award winning and leading commercial property services company, Broll Nigeria launched the Occupier Services Snapshot Report on Lagos and Accra Office Markets at the recently concluded West African Investment Summit (WAPI) 2017 which held at Eko Hotel and Suites in Lagos.
The report revealed by Nnenna Alintah, Head, Corporate Real Estate Services and Research of the company focuses on the occupier perspective in the office markets in Lagos and Accra highlighting the major statistics that determine decisions on rent by corporates.
In her presentation on the Lagos Office, Nnenna drew attention to the overall rental trend which has ‘’endured a consistent decline in the past four years due to the simultaneous increase in building stock and contraction of economic activity which has seen it drop by 56% to an average of 640/sqm/annum in Victoria Island and 40% to 710/sqm/annum in Ikoyi.” It stated that while there have been a huge increase in development stock in Ikoyi, mostly around the Alfred Rewane axis and over a hundred thousand square meters taken in that market, the rest of the office space is on the mainland majorly in Ikeja, Surulere and Yaba.
The composition of demand has also changed significantly due to a fall in demand from the oil sector and increase in other sectors. According to Alintah, there has been more demand for prime grade office coming from the financial services and technological Sectors in the last two to three years. “Contrary to what we have had in the past, where the oil and gas sector was a strong driver of demand, demand has typically been driven in the last couple of years from the technology and financial services sector,” she said. The report also analyzed the building stratification of the office market in Lagos stating that at 67% of total stock, B Grade buildings represent a significant portion of the Lagos office market. The fall in A Grade rents has led to companies looking at relocation options from B Grade to A Grade.
Commenting on the report, Broll Nigeria CEO, Bolaji Edu noted that “trends and dynamics are changing and investors need to be aware of these changes to guide their developments. This snapshot report will guide businesses in making the right decisions. This is something we intend to continue to do so that businesses can adapt to the sort of changes that influence making decisions when buying into real estate.”
Finally, the report analyzed how Landlords and Tenants have fared with each other during the years in view. Noting that there have been more landlord contributions to fit out costs in the range of 100-300sqm. Rents are trending as low as 550/sqm/annum in prime locations highlighting landlord strategies to retain and attract tenants”. There is also flexibility in rent payment. From the tenant viewpoint however, sitting tenants lease tend to realign rents to match market, release vacant space and sublease excess space, the report stated.
Broll Property Group was the platinum sponsor of the West African Investment Summit (WAPI); the two day prestigious event was hosted in Nigeria for the first time.