• Friday, March 29, 2024
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Experts see sustained supply of prime office space amid softened demand

Eko Atlantic (1)

The property market has, in the last five years, seen a spike in the supply of prime office space and experts say there will be sustained supply of these prime products despite softened demand and fragile, sluggish recovery of the wider economy.

This, they explain, is because investors with patient capital now take long view of the market even as investment  interest remains strong and the current economic condition, a boon for smart investors.

In the Lagos property market, Victoria Island and Ikoyi are the most active sub-markets for state-of-the art structures, though recent developments have shown that the latter has outpaced the former as a  destination for iconic structures.

However, the upcoming  Eko Atlantic City, an ambitious city development sitting adjacent to Victoria Island is ahead of competitions in terms of location, project size and superior infrastructure.

This is where Building Landwey Investment Limited, a real estate investment company, is planning its top-of- the-range The Audacious Skyline— an iconic mixed-use development designed to rise 28 floors on 3,500 square metres land.

LandWey operates within the commercial, retail and residential property segments and provides real estate advisory services. In recognition of its strong footprints in these space, the company was chosen as the ‘Real Estate Investment Company of the Year’ in BusinessDay’s ‘Nigerian Business Leadership Award’ held in Lagos at the weekend.

The Audacious Skyline is a piece of architecture  that promises tastefully finished beach-front residences and penthouses, commercial spaces, multi-level parking, designated elevators, personalised concierge services, etc.  All these, according to Olawale Ayilara, the company’s Founder/CEO, will be executed with topnotch construction procedures and standards.

“As a brand, we are ready and equipped to take on the project armed with robust experience in construction as well as our strong partnerships with world class architects, engineers and designers,” Ayilara assured.

Ikoyi, formerly known as a residential enclave, is home to many high-rise edifices on the Alfred Rewane axis, with the likes of Temple Tower, British America Tobacco (BAT) Rising Sun, Lake Point Towers, Alliance Place, Famfa Oil Tower and Heritage Place competing for skyline of the highbrow area.

Chances are high that more of such high-rise structures would find their way to the market in the next couple of years, which would consequently transform the axis to a major commercial hub, expert says.

“If you look at the master plan of Ikoyi, it’s only Awolowo and Alfred Rewane road that are designated for iconic structures, indicating that supply will be maintained at current levels going forward,” said Yemi Stephen, partner at  Estate Links.

Stephen noted that owners of unutilized landed assets facing the road would likely sell or sign a joint venture to construct office building, even though there is excess supply in the market.

According to experts, period when the broader economy is in downturn or gradually picking up is the best bet for investors to put in their funds into real assets to leverage capital appreciation when market rebounds.

“This is the most suitable time to build such that when your building is almost completed, by then the market would have expanded rapidly”, Stephen stated, adding that market outlook holds prospects if the fiscal authorities get it right.

Najeem Adeyemi, realtor at Ewenla & Mustapha, hopes that value will trend upwards but will be determined by how sophisticated the properties are along with theirs service offering.  “Land value alone on Alfred Rewane axis is about N400, 000 per square metre. That axis commands higher value than Ozumba Mbadiwe axis in VI,” Adeyemi said, noting that land value drives property yield.

The market in the first quarter of 2019 saw the entry of Kingsway Tower, standing tall on 15 floors and contributing 13, 317 square meter space to an already oversupplied market place.  The mixed-use building was designed for mid-sized corporates as well as multinationals that seek presence in Nigeria’s economic heartbeat, Lagos. It offers retail space as well.

Also during this period was the arrival of Famfa Oil Towers situated on the corner of Alfred Rewane on Olawole Dawodu road in Ikoyi, courtesy of Dayspring Property Development Company, chaired by Africa’s wealthiest woman, Folorunsho Alakija.

A report by Lagos-based real estate consulting firm, Knight Frank, notes that vacancy rates for prime office space remains high as market has not fully recovered to bolster demand for rental per square metre, which is a bit high.

Rent for Grade ‘A’ office space market has headed south in both asking and achievable rents from $1, 000 per square metre to about $850, but this trend may not linger as supply is expected to maintain tempo in the short to medium term.

CHUKA UROKO & ISRAEL ODUBOLA