Lekki Phase 1's official CBD is finally developing. Here's why it's too late

Lekki Phase 1 was initially designed to be a serene residential neighborhood suitable for families and young professionals with one designated Central Business District (CBD) being The Rock Drive/C&I Leasing/Abayomi Shonuga Quadrant (The Quadrant). However, the estate has changed dramatically, instead, it has become more commercialized with over  87,839m² of commercial developments creeping in over the last decade.

 

 

Through the years, as Lekki Phase 1 witnessed more commercial activity, retail and offices were built on areas that were not designated for large scale commercial activity. Most of the activity has been seen along Admiralty Way, Fola Osibo/Emma Abimbola Cole Road, Adebayo Doherty Way, along Freedom Way, and others. This led to the establishment of business hubs across the Lekki Phase 1 area rivaling the initially designated CBD.

 

Following this, The Quadrant is now coming to life as the designated CBD of Lekki Phase 1. This has been underpinned by a  commercial stock of approximately 12,000m² and a pipeline that includes: NDIC Lekki Training Office Building, Property Gate HQ, and Nigerian Bar Association Center.

 

However, the development of the designated CBD might be a little too late. We outline four major reasons below:

 

• The 26,187m² of Commercial Stock in Lekki Phase 1 is located on or off Admiralty Way

 

According to Estate Intel, 28.5% of commercial (retail and office) stock in Lekki Phase 1 is located on or directly off Admiralty Way – greater than any other street or major road in the area. Notably, this is much higher than the stock in the initially designated Central Business District which is The Rock Drive/C&I Leasing/Abayomi Shonuga Quadrant at 12.9%. 

 

Interestingly, over 22,000m² of stock was delivered on Admiralty Way and arterial roads in the last decade with the completion of the Lekki-Ikoyi Link bridge, cheaper land prices when compared to Ikoyi and Victoria, and change of use laws considered key drivers of its commercialization. 

 

• Revised MasterPlan and Change of Use Laws Have Diversified Lekki’s Business Districts

 

The rezoning of initial residential streets and Admiralty Way as part of Lekki’s CBD in the revised Lekki Phase 1 Masterplan has further shifted Lekki from a predominantly residential area. As such, coupled with the slow growth of The Quadrant as the area’s CBD, the rezoning could further hamper its growth due to a redistribution of commercial areas.

 

According to Estate Intel, The Quadrant accounts for the second lowest share of commercial pipeline in Lekki Phase 1, behind the rest of Lekki Phase 1 and Admiralty Way. Based on its current pipeline, its estimated stock by 2024 will be just over 16,000m², which is less than the current stock in Admiralty Way, further indicating comparatively low commercial interest from investors.

 

 

• The State’s Recent Emphasis on Land Use Regulation Could Drive the Commercialization of Rezoned Streets in Lekki Phase 1

 

At the time of the rezoning of residential streets to commercial, the exercise likely put residents in the difficult position of deciding to either sell their property, convert it to mixed-use or leave it as is while paying increased taxes. Owing to the State’s previous approach to building regulation, some residents could opt for the latter option which is against commercial zone usage laws.

 

However, while the Lagos State Building Control Agency (LASBCA)’s approach to the implementation of land use laws has been mostly reactive, the State Governor has placed greater emphasis on town planning and zoning adherence in the past year which could mean added diligence in regulating land use laws going forward. Considering most of the rezoned residential streets are located off Admiralty Way, this will further increase the commercial supply on Admiralty Way.

 

• Better Accessibility and Higher Foot Traffic Make a Better Case for Admiralty Way and Providence Street 

 

As two of the other designated business hubs are located on/by major roads within Lekki Phase 1, they offer greater appeal for commercial developments. For instance, Admiralty Way which is accessible via the Lekki-Ikoyi Link Bridge and Ozumba Mbadiwe Avenue/Lekki-Epe Expressway. In addition, the Providence Street business hub is directly accessible from Admiralty Way and Lekki-Epe Expressway. As such, they have the highest share of completed commercial developments including Lennox Mall and Admiralty Mall on Admiralty Way and Providence Mall on Providence Street with a healthy pipeline that comprises Richfield Lekki on Admiralty Way and Lekki Town Square on Providence Street.

 

Furthermore, in terms of footfall, Admiralty Way’s offering of plazas, restaurants, and banking institutions makes it the busiest road in Lekki Phase 1, thereby offering businesses located on or along the road greater visibility. On the other hand, The Quadrant does not offer this level of activity due, in part, to being less developed as a CBD and also being located in the more central part of Lekki Phase 1.

 

As Lekki Phase 1 Becomes More Commercial, The Quadrant is Unlikely to Overtake Admiralty Way

 

Through the years, Lekki Phase 1 has grown as a preferred commercial location. This has been evidenced by the 454% increase in commercial stock encompassing both retail and office developments since 2013. The growing population of middle-upper income earners and young professionals indicates a fertile location for retail stores. In addition, Lekki’s cheaper land prices but proximity to Victoria Island and Ikoyi make it an appealing location for companies. Overall, these points make convincing arguments for its continued commercialization.  

 

Following this, as Lekki Phase 1 becomes more commercial, based on the factors listed above, we do not expect The Quadrant to catch up with the Admiralty Way business hub as the preferred commercial location in Lekki Phase 1. However, it might benefit from demand spillover from the Admiralty CBD later on. 

 

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