By Jude Njoku
LAGOS Island, unarguably the hottest business district in the country is witnessing an unprecedented surge in the value of commercial properties.
The district which houses the tallest buildings competing for visibility has once again become the toast of property investors and corporate organisations just as it was in the late 1980s and early 1990s. But these big players deserted the area in droves because of the decay in the infrastructure coupled with the menace of street urchins popularly called in the Lagos parlance “area boys” and activities of street traders.
Persistent calls for action by the Lagos Island Millennium Group on the Environment (LIMGE) and similar non-governmental organizations (NGOs) on the government to check the downward slide in the fortunes of the CBD fell on deaf ears until recently when the state government embarked upon massive redevelopment of the Island.
Prior to the redevelopment, most banks and blue chip companies relocated their head offices to Abuja, Victoria Island and South West Ikoyi. In fact, the situation was so bad that most high-rise buildings in the Business District became virtually unoccupied.
With the redevelopment and beautification of the outer Marina, the once deserted CBD is once more booming and corporate organisations and individuals have begun to find their way back to the bustling neighbourhood.
The vacancy rate has dropped considerably and properties which before now were under lock and key have started to welcome new tenants. Depending on the age and functionality of the property, rents oscillate between N15,000 and N25,000 per square metre.
Confirming this development, the managing partner of Nelson Thorpe Alonge, ( a firm of estate surveyors and valuers), Mr Victor Alonge explained that rents for commercial properties in the Island will continue to rise although the growth rate may have slowed down a little. “In real terms, the value of commercial properties is increasing. You know that corporate tenants are more selective in their of choice of properties. Smart office environment plays a key role in tenants selection of properties,” he said.
Alonge stated that despite the redevelopment of the CBD, we still have a dearth of very good office accommodation in the Lagos island Business District. “Corporate tenants are constantly looking for office accommodation in smarter, more modern and functional environment. Some of the buildings are functionally obsolete. What that means is that they don’t have facilities that a modern and functional office should have,” he explained.
Another estate surveyor and valuer, Mr Stephen Jagun noted that the problems encountered by some corporate tenants in Victoria Island have forced some of them to head back Lagos Island CBD. This relocation, he said, has affected the rental value of commercial properties on the Island.
Older buildings, according to him, now attract N10,000 -N15,000 per square metre while newer properties with more functional facilities attract an annual rent of between N20,000 -N25,000 per square metre. Vanguard Homes & Property learnt that the renewed interest in the district has forced some property owners to embark upon the renovation and upgrade of facilities in their buildings.