Back in 2011, a report published by Knight Frank ranked Lagos among the 12 top most expensive office markets globally, alongside other cities such as Singapore, London, Hong Kong, and even New York. At the time, the office market in Lagos was at its peak with landlords holding most of the power, largely due to a limited supply of high-quality buildings. The market 10 years later is significantly different and the power dynamic currently lies in favour of the tenant because supply has grown and the economy has weakened. 

Even though our favourite African megacity is no longer included on the office market rich list in 2021, most Nigerian businesses within the country will find that rents in prime buildings are still largely out of reach. In this simple note, we compare the occupancy costs and specifications of a few of Ikoyi’s nicest buildings.

Before you commence, here are  few assumptions we’ve made: 

• A 50 person office will be approximately 500sqm with the typical 10 sqm per person space assumption. In reality, this figure can increase or decrease depending on the layout of the office.
• Service Charges (excluding diesel) are an estimated 12.5% of rent annually. Even though buildings like Heritage Place are able to offer service charges slightly less than the market average due to their integration of green and sustainable elements, we’ve kept the service charge assumption constant for all buildings because the average cost is usually the equivalent of 10-15% of rent. 
• Fit out, which typically includes the design, build out and furnishing of office spaces is another cost to remember. Fit Out Contractors including Spacefinish, Haussmann Africa Spacefinish, and Space and Array have completed work for PwC in CCP Place, Broll in Number One, and BP in Heritage Place respectively. We asked our friends at Spacefinish what to budget for a high-quality office fit-out. Their estimate was $900 per sqm for A-Grade spaces and $500 per sqm for B-Grade.
• Legal Fees and Agency Fees are 5% each. 

As the table below shows, the cost range for a 50 man (or 500sqm) office in A and B-Grade buildings within Ikoyi and Banana Island starts from $526,000 in The Adunola, a B-Grade building in Banana Island and goes as high as $940,000 in Kings Tower, an A Grade office building in Ikoyi. 

Which property do you think offers the best value for money? We have included a table showing the property’s specifications below to help you decide. Let us know on LinkedIn what your answer is!

Feel free to reach out to [email protected] for your research questions or [email protected] if you’d like us to put you in touch with the leasing reps for any of these buildings.