February 8, 2020

5 Office Buildings that have been 100% Vacant for Over 5 Years

Dolapo Omidire

After the end of an eventful decade that saw over 300,000sqm of space being delivered to the Lagos Office Market, there is still a healthy statewide development pipeline of over 120,000sqm. Despite the existing supply overhang and a low take-up as shown by occupiers shuffling between A & B Grade Offices, Converted Residential Buildings and Serviced Office Spaces, new developments are still breaking ground almost quarterly. Though many of the projects in the pipeline are part owner-occupied, the consistent development starts demonstrate that some investors still have confidence in the market. 

While some recently delivered buildings including Temple Tower and Heritage Place among a few others are nearing or at full occupancy, many others are struggling. Here are 5 properties that have been empty since they were completed over 5 years ago.

5 Office Buildings in Victoria Island, Lagos that have been Vacant for Over 5 Years
5 Office Buildings in Victoria Island, Lagos that have been Vacant for Over 5 Years

    Why are they still empty?

    A lot of emphases has been placed on the completion of A-Grade developments and the ensuing dip in their achievable rentals, however, many B Grade properties on the market have had it worse. The graph below shows the trend of rents over the past few years. 

    Average Rents. 2018 intentionally skipped. 5 Office Buildings that have been Vacant for Over 5 Years
    Average Rents. 2018 intentionally skipped. 5 Office Buildings that have been Vacant for Over 5 Years

    Year on Year, B Grade property rents have noted an annual decline of over 23.8% on average, much worse than the annual average decline of 12% seen from A+ and A Grade property. Even though there is a clear case for investing in refurbishments and renovations or strategically located B Grade developments, the brand new B Grade stock delivered when better quality space was under pressure gave them little to no competing chance.

    Related Articles

    INDUSTRY NEWS

    UPDC Reports ₦15.883 billion Loss for FY:2019

    READ MORE
    INDUSTRY NEWS

    REIT Market Update: SFS Real Estate Investment Trust

    READ MORE
    INDUSTRY NEWS

    Hilton Group’s Conceptual Hotels near Nigeria’s International Airport

    READ MORE

    Access the data you need now

    It's free to sign up! Check out reports, the directory and interactive dashboards.

    Sign up for free