Knight Frank Nigeria has offered insights into how easing inflation, stronger construction activity, and rising industrial demand shaped the performance of the Lagos property market in the second half of 2025.
The firm is a member of Knight Frank LLP, the leading independent global property consultancy, serving as clients’ partners in property for over 128 years globally, and 60 years in Nigeria.
The explanation of the market performance is contained in the firm’s new report titled ‘Lagos Market Update H2 2025’, which was unveiled at a media briefing in Lagos recently.
The report, which highlights activities across various market segments, indicates that moderating price pressures and increased infrastructure spending helped stabilise key real estate segments, with notable shifts across office, residential, retail and industrial markets.
“The second half of 2025 presented a mixed but increasingly stable economic climate for Nigeria. Inflation eased further, construction activity outperformed the broader economy, and key public infrastructure corridors experienced renewed momentum.
These developments have had a direct influence on how the Lagos property market evolved,” Frank Okosun, senior partner/CEO of Knight Frank Nigeria, noted.
Okosun explained, however, that moderating inflation did not mean a reduction or fall in prices, as building and other construction materials continued to command high prices in various markets across the country.
The price of cement, for instance, remained high irrespective of brand and ended the year at between N10,000 and N11,000 per 50kg bag in many parts of the country, especially Lagos.
James Lewis, chairman/MD of Knight Frank Africa and Middle East, who was at the unveiling of the report, commended Knight Frank Nigeria for consistently delivering quality research reports and providing guidance for stakeholders in the market.
Of particular interest in the report is activity in the industrial and logistics segment of the market, which shows renewed momentum driven by improved manufacturing activity and sustained demand around Special Economic Zones.
According to the report, the industrial purchasing managers’ index (PMI) rose from 49.1 to 57.0, signalling sector expansion. Demand for warehouses near ports and SEZ corridors also strengthened, while occupiers outside SEZs continued to prioritise more affordable Grade B and C stock due to wide rental differentials.
“The office market activity showed mixed performance. While occupiers remained selective about prime spaces, decentralised business districts such as Ikeja recorded increased enquiries and transactions, supported by accessibility and cost considerations,” Daniel Fabi, lead research analyst at Knight Frank Nigeria, explained.
The analyst reasoned that decentralisation may continue into 2026 as businesses optimise operational costs.
In the residential market, the report reveals that investor interest in short-let apartments and faster-turnover projects remained strong, reflecting a growing preference for assets with quicker returns.
The report also highlights evolving tenant behaviour as developers and landlords respond with more flexible residential offerings. This market situation points to where opportunities exist for investors, especially those interested in that segment of the market.
Retail trends continued to be shaped by affordability and consumer proximity, the report says, pointing out that hyper-local retail formats outperformed large traditional outlets, as neighbourhood-based stores benefitted from households adjusting to price sensitivity and convenience-driven shopping.
The report hopes that this shift is expected to continue in the near term.
Commenting on the wider national context, Lanre Sonubi, Head of Marketing and Corporate Communications, noted that Abuja and Port Harcourt also displayed noteworthy trends during the review period.
“Abuja recorded stable demand for serviced apartments and medium-density housing, while Port Harcourt saw moderate growth fuelled by oil and gas businesses and rising industrial activity around Trans-Amadi and Eleme,” he said, adding, “these trends complement the Lagos findings and reflect broader market dynamics nationwide.”
The report emphasises that infrastructure improvements across Lagos, including ongoing road, bridge and urban renewal developments, will continue to influence land values and investment appetite across emerging corridors.
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