Competition imminent as property market anticipates 150,000sqm office space

The office space segment of the property market will be competitive and a lot better with new products as investors jostle for position with about 150,000 square metres of office space to be delivered in the next 24 to 36 months, BusinessDay checks have revealed.

The market, according to our findings, is increasingly migrating to international standard, making it important that new products coming into the market should provide all the necessary components that will make them real office building.

“When you talk about a Grade A office complex, you are talking about one that has a complete set of attributes that make it Grade A. You can’t have a Grade A office space without a parking space. Such an office space must have amenities, some level of security, quality finishing and infrastructure”, an institutional investment analyst, who did not want to be named, told our correspondent.

According to the analyst, many of the existing office buildings are struggling today because they don’t have all it takes to be modern office building, noting that over 90 percent of offices in Nigeria operate from residential buildings.

He said that the market was still in dire need of Grade A office complex, noting that there hasn’t been a significant development in that segment of the market.

“In Lagos, for instance, except recent ones like Mansard Place, Total Building and KPMG Building, more developments are in the pipeline including the Actis 14-floor Heritage Place; the 24-floor Eko Pearl Tower, among others”, he said.

Tosin Runsewe, managing director of Mansard Insurance, affirmed in an interview with BusinessDay that the market is in need of Grade A office space.

Runsewe, who spoke exclusively to our correspondent at the opening of the Mansard Place in Lagos, said they were delighted to introduce a Grade A commercial property onto Victoria Island CBD.

“There are first class organisations that want to be housed in first class property like this one. The whole building has been taken up; the pricing has been good, though not cheap, and that shows you that people are willing to pay for high quality structures with high quality finishing, workmanship, materials and design that take care of environmental and safety standard”, he said, stressing that “when you have all these in place, you will surely find top organisations that are willing to pay the price”.

The investor, however, pointed out that what is happening in the market is based on perception, explaining that “everybody is building waiting for the multinationals and there are just a few of them”.

“Most of the office buildings are being built speculatively; many of them haven’t got tenants and rents may be trending downwards in order to absorb the huge supply expected in the market”, he added.