On the 29th of April, Workstation announced that the billing and invoicing of their plans will be denominated in USD with an option to be paid in Naira. This evening, however, the company has updated and clarified that pricing will instead be benchmarked to USD but invoicing and payment will remain in Naira. The company is one of the largest co-working and serviced office space providers in Lagos with a flagship centre in Victoria Island and another in Maryland Mall, Ikeja.
In the note emailed to their community members yesterday, Workstation said:
“These are unprecedented times with so much uncertainty surrounding the economic impact of the COVID-19 Pandemic. The pandemic has served as a catalyst for a once in a lifetime storm of events that have adversely impacted the dynamics of local and global business trade. In view of these uncontrollable changes, we have had to make some adjustments to better position us to serve our member companies better. “
The changes are expected to come into effect on the 1st of May.
Speaking with Fareed Arogundade, Founder of Workstation, he explained to Estate Intel that the looming risk of a Naira devaluation drastically affects their ability to meet foreign exchange obligations, which were fundamental in initially funding Workstation’s business. This is chief among the reasons why the company has decided that pricing for their spaces will now be benchmarked to the Dollar.
In our recent report, Nigerian Real Estate and COVID in 19 Slides, we explain that demand for flexible serviced private office spaces will increase in the post-COVID environment as occupiers who need physical space opt for options that give them flexibility in payment and lease tenor. This means that some coworking providers may explore increasing their private office capacity in lieu of the more open plan hot desk option; especially if many of the usual hot desk users continue to work from home after the lockdown ends.
According to Fareed, since the beginning of the COVID-19 pandemic in Nigeria, “…we have experienced a 98% decline in the coworking side of our business because our community members are staying home to stay healthy and avoid public spaces”. Though new demand has been flat, the private office segment of their business has been more resilient and he expects that existing leases will hold them for the next few months ahead.
The Workstation team anticipated and has already received pushback on the coworking and open-plan space-related plans say they are exploring how to provide more digital solutions and virtual services for this segment alongside other discounts to keep the community happy.