Properties in prime corridors outperform expectations with high occupancy rates

Contrary to expectations, properties in prime corridors in Lagos, such as Ikoyi, Victoria Island, and Ikeja, have continued to record high occupancy rates, a new report shows.

Despite shifting economic tides, prime office occupancy remains robust at 79 percent in Ikoyi, 83 percent in Victoria Island, and 82 percent in Ikeja, which underscores consistent corporate demand and the enduring appeal of Lagos’ top commercial hubs.

Office market is not alone in this. Prime residential areas have also recorded the sharpest acceleration between 2024 and 2025. Rents for houses and flats rose by 45 percent across Banana Island, Lekki Phase 1, Ikoyi, Victoria Island, and Magodo Phase 2, reflecting input-cost adjustments and renewed demand from high-income earners and diaspora investors.

Expectations were that with the challenges in the economy, especially inflation and currency devaluation which affected business, coupled with the traction gained by hybrid or flexible work, occupancy rate in offices would drop as witnessed in the hospitality sector.

The office market is concentrated primarily in Lagos as the country’s commercial centre and remains resilient. Building on trends from the first half of 2025, the second half saw growth in supply, progress in negotiations for new leases, and a focus on flexible spaces.

This implies that Lagos is a destination of choice for investors who with eye on commercial office space which before Covid-19 witness upsurge in development and heightened uptick in demand.

“Offices with secured long-term occupiers retained appeal, taking up new tenants along the way. Older assets faced higher vacancy pressures. New deliveries in Lagos, such as The Pantheon Tower (Ikoyi) and Phoenix Office Park (Ikeja), increased the Grade A stock in that year,” Martin Uche, director, research and advisory at Fortren and Company, told BusinessDay.

Despite the economic headwinds, notable developments can be spotted in the market and these include Northwest Petroleum and Gas HQ (8,300sqm), Misa Office HQ (12,720sqm), the Dangote Industries HQ (17,000sqm), and First Bank’s 40-floor HQ in Eko Atlantic.

“High energy and construction costs influenced early-stage landlord desperation,” Uche said, explaining that this led to concessionary leasing terms and aggressive tenant retention strategies. Project announcement in areas like Eko Atlantic City highlighted demand for infrastructure-rich zones.

In the residential segment of the market, Temidayo Oloyede, Co-Founder/CEO, Edala Development, affirms that the Lagos residential market slammed on the accelerator, explaining that despite a high interest environment with the Monetary Policy Rate holding at 27 percent through October, the market has demonstrated immense strength.

Oloyede noted in the company’s recent report that while headline inflation decelerated to 16.05 percent as of October 2025, their primary data reveals a Landlord Inflation Gap where average rents in key nodes surged by 105.6 percent, completely detaching from the official inflation baseline.

This pressure, according to him, is most visible in the Tech Hub of Yaba where studio rents skyrocketed by 400 percent from N300,000 in 2020 to N1.5 million in 2025. Similarly, Surulere recorded sharp growth as one-bedroom rents appreciated by 300 percent to hit N1.6 million.

“The five-year review period from 2020 to 2025 highlights a massive repricing of land as the ultimate store of value. Banana Island reaffirmed its status as the apex of value with land prices appreciating by over 540 percent to reach N3.05 million per square metre. Ikoyi followed closely rising 412 percent to N2.15 million per square metre.

The most aggressive growth in the sales market was recorded in the Lekki Phase 1 corridor where the price of a two bedroom apartment surged 251 percent climbing from N70.5 million in 2020 to N247.5 million in 2025. This market node continues to maintain its market lead for small unit apartments, especially two-bedroom which appeals to young executives working on the island.

Oloyede pointed out that Eko Atlantic City continues to command the highest absolute values with one-bedroom units trading at N400 million. “Looking ahead, market dynamics are being reshaped by historic infrastructure spending and regulatory enforcement,” he stated.

The commencement of operations at the Lekki Deep Sea Port is projected to add $360 billion to the economy coupled with the beginning of the $3-billion Green Line Rail project which is shifting the centre of gravity toward the coastal corridor.

“However, the state’s decision to pause building permits along the Coastal Highway and the declaration of 176 estates as illegal signal the end of unregulated expansion,” Oloyede said.