The retail real estate sector exhibited mixed fortunes, with significant growth in modern retail formats juxtaposed with the resilience of traditional markets.
This is according to a report, which stated, “The cost of renting a 1000-square-meter Grade-A office space was $700 per square metre. Meanwhile, co-working spaces grew in popularity, with monthly prices for dedicated desks ranging from N50,000 to N100,000.
“The shift to hybrid work models reduced demand for traditional office spaces, but prime locations like Victoria Island, Ikoyi, and Maitama remained popular with multinational companies and financial institutions. According to data from Ubosi Eleh + Co, a Lagos-based real estate firm, the cost of renting a 1,000-square-metre Grade-A office space was $700 per square metre in 2023.
“At that time, the total rent was N325m, based on the Nigerian Autonomous Foreign Exchange rate of N465 to $1.” By June 2024, the Nafex rate had increased to N1,400 to $1.
As a result, the same office space cost N980m.
This was a rise of over 200% in just 12 months. The spike reflected the effects of inflation, currency devaluation, and market instability on Nigeria’s commercial real estate sector.”
On industrial real estate, the report noted that in 2024, Nigeria’s industrial real estate sector showed potential, fuelled by the rapid growth of e-commerce and logistics, particularly due to the rising demand for warehouses and distribution centres.
It added, “This demand was notably driven by increasing online retail activity and a need for efficient supply chain networks. However, the sector faced persistent challenges related to infrastructure deficits, such as inadequate road networks, unreliable electricity, and high operational costs. Furthermore, the impact of significant industrial and infrastructure investments on Lagos’ real estate market shows a series of transformative developments within the state.
“Between 2010 and 2013, Lagos reportedly reached the trillion-naira revenue mark, with a growth of over 145% a decade later. The state’s substantial investments and strategic partnerships in transportation infrastructure and real estate projects have notably boosted its revenue and earnings potential.
“Among the high-profile developments were the Dangote Refinery, occupying 2,635 hectares of land (seven times the size of Victoria Island), and the Dangote Fertiliser Plant, covering 500 hectares and with a production capacity of three million metric tonnes of urea. The Lekki Deep Seaport, occupying 90 hectares, is part of the larger 850-hectare Lagos Free Zone, while the Lekki Free Trade Zone itself spans 16,500 hectares and houses numerous industries. The state’s transportation projects include the Blue Line Railway (Phase 1), a 13-kilometre rail track linking Marina with Mile 2, and the Red Line Railway, a 28-kilometre track connecting Agbado to Ebute-Metta. Additionally, the 127.60-kilometre Lagos-Ibadan Expressway links Lagos, Ogun, and Oyo State.”
