Nigeria is most expensive office space market in sub-Saharan Africa – Report

A report on the property market in sub-Saharan Africa prepared annually by Broll Property Services has shown that Nigeria is the most expensive market for the office space segment of the market.

The report explains that as against Ghana’s $37 monthly for a square metre in a Grade A office space and $26 apiece in Mauritius and Madagascar for the same period, a square metre in an Grade A office space in Lagos or Port Harcourt could rent for as high as $70 a month, making it 100 percent higher.

Broll, one of Africa’s leading commercial property service providers, claims that despite the availability of prime properties in major city centres such as Lagos and Abuja, the needs of some international tenants seeking befitting office spaces are yet to be met, thus increasing the rents of the available spaces as demand for same outstrips supply.

Looking at other sub-Saharan African countries, in Rwanda and Namibia, respectively, the rents are $20 and $18 per square metre, while it is between $15 and $19 in Kenya within the same period.

In Malawi, rent per square metre ranges between $13 and $6 monthly, while Zimbabwe’s paltry $11 per square metre has been attributed to poor economic climate as most office spaces in major cities remain vacant.

“Despite the springing up of several A-grade structures in recent times such as Maersk House, Churchgate II Towers, Eko Towers, FF Towers, and Mansard Place all located on Victoria Island axis of Lagos, rentals for these developments have remained relatively high with yearly rents ranging between $600 and $850 per square metre,” the report further explained.

Obi Nwogugu, head, real estate unit, Africa Capital Alliance, had earlier said that “the office space market has seen continued growth in recent times”, estimating that the market is expecting about 250,000 square metres office space in the near future between Ikoyi and Victoria Island axis of Lagos where there is business hub.

Meanwhile, the global office market is expected to witness a steady growth in 2014, as companies globally demand for a conducive workplace that improves productivity and workplace satisfaction which are rare in old office stock, a recent report by Cushman & Wakefield has said.

Market observers believe the growth will also be visible in Nigeria’s commercial space with the delivery of major projects such as the Kanti Towers in Victoria Island, while work has intensified on the 15-floor Civic Centre Towers also in Victoria Island, Lagos.