A new phenomenon that will be redefining the commercial office market in Nigeria in 2018 is the co-working office space. Analysts say this is going to be the biggest change, which this segment of the property market will be seeing in the New Year.
Tayo Odunsi, CEO, Northcourt Real Estate Limited, explains in a telephone interview that co-working spaces will dot the cities and may even begin to move into A-grade office buildings to house the small but mighty enterprises that can afford it.
The good news here is that this development will be giving office buildings, which have been having difficult times with oversupply and rising vacancy rate, the much-needed uptake they anxiously require.
By its very nature, co-working office space allows small business owners, self-employed people, internet companies and independent consultants and professionals to also enjoy the benefits of a prestigious business address and full complement of administrative services without the expenses of establishing a traditional office.
Co-working office space, which crept into the property market as part of responses to the economic recession in the country, is becoming a ‘welcomed’ segment of the commercial real estate business as dynamic property developers, with proper insight, are becoming more flexible and adjusting their offerings in line with the requirements of their ‘would-be’ occupiers.
This is also part of the positive expectations in the property market which analysts predict will witness modest growth in 2018 to be driven by a combination of factors including increased liquidity in economy, positive sentiment arising from the country’s exit from recession, easing inflationary rate, etc.
“Unlike the turn of 2017, the New Year holds more certainty, hope and activity,” says Odunsi, adding, “a lot of projects across the various real estate sub-sectors, which got stalled during recession, have been restarted and a good number are expected to be delivered in 2018.
“So, while the highlight of 2017 was that Nigeria came out of recession, 2018 is poised to be marked by recovery. Prices will not rise to the 2014 highs in real terms, but the revival will be clear and evident.”
He sees a few changes taking place in two sub-sectors. First will be that affordability will become a bigger issue in the residential markets. Buyers will insist on more for less, and developers will have to think more deeply to bend.
The commercial space, he added, will not be the same because retail malls are getting smaller, and will continue to do so. Rents and service charges will also normalise to enjoy the recovery experienced in other areas of the economy.
“The office market will see the biggest change. Co-working spaces will dot the cities and even begin to move into A-grade buildings to house the small but mighty enterprises that can afford it. This will give Nigeria’s shiniest buildings the much-needed uptake it anxiously requires,” he stresses.
The residential sub-sector, according to Rotimi Akinlose, CEO, Residential Auction Company (RAC), will continue to thrive as developers churn out more housing projects following demand for housing units.
“But affordability will be key for buyers,” he counters, adding that the rental sector holds a lot of prospects for potential investors, especially for single professionals and young families, that are looking for cheap and affordable accommodation to rent because of the high cost of housing in the major cities like Lagos and Abuja.”