{"id":4920,"date":"2017-06-12T04:33:00","date_gmt":"2017-06-12T04:33:00","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/nigerias-commercial-real-estate-market-outlook-still-gloomy\/"},"modified":"2017-06-12T04:33:00","modified_gmt":"2017-06-12T04:33:00","slug":"nigerias-commercial-real-estate-market-outlook-still-gloomy","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/nigerias-commercial-real-estate-market-outlook-still-gloomy\/","title":{"rendered":"Nigeria\u2019s commercial real estate market outlook still gloomy"},"content":{"rendered":"<p><\/p>\n<div id=\"\">\n<div id=\"attachment_308901\" class=\"wp-caption alignnone\" readability=\"32\"><img data-recalc-dims=\"1\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017.jpg?resize=1280%2C721&#038;ssl=1\" data-lazy-src=\"https:\/\/i0.wp.com\/guardian.ng\/wp-content\/plugins\/ventra-lazy-load\/images\/1x1.trans.gif?ssl=1\" data-lazy-srcset=\"https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017.jpg 1280w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-640x361.jpg 640w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-1062x598.jpg 1062w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-320x180.jpg 320w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-281x158.jpg 281w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-562x316.jpg 562w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-531x299.jpg 531w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-487x274.jpg 487w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-974x549.jpg 974w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-600x338.jpg 600w\" class=\"wp-image-308901 size-full\" alt=\"\" width=\"1280\" height=\"721\" sizes=\"(max-width: 1280px) 100vw, 1280px\"\/><noscript><img data-recalc-dims=\"1\" decoding=\"async\" class=\"wp-image-308901 size-full\" src=\"https:\/\/i0.wp.com\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017.jpg?resize=1280%2C721&#038;ssl=1\" alt=\"\" width=\"1280\" height=\"721\" srcset=\"https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017.jpg 1280w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-640x361.jpg 640w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-1062x598.jpg 1062w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-320x180.jpg 320w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-281x158.jpg 281w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-562x316.jpg 562w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-531x299.jpg 531w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-487x274.jpg 487w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-974x549.jpg 974w,https:\/\/guardian.ng\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017-600x338.jpg 600w\" sizes=\"(max-width: 1280px) 100vw, 1280px\"\/><\/noscript><\/p>\n<p class=\"wp-caption-text\">An illustration of a proposed commercial development. PHOTO: UBOSI ELEH AND COMPANY<\/p>\n<\/div>\n<p>Uncertainties in the <a href=\"https:\/\/amazingproperty.com.ng\/blog\/property-center-nigeria\/\">real estate<\/a> industry have continued to dampen <a href=\"https:\/\/amazingproperty.com.ng\/blog\/nigeria-property-center\/\">commercial property<\/a> market, on the back of a turbulent Nigerian economy.<\/p>\n<p>And this monetary and fiscal polices largely driven by the country\u2019s macroeconomic fundamentals, stoked inflation, slowed economic growth and created a volatile exchange rate.<\/p>\n<p>According to the Nigeria Real Estate Market review and Strategic Outlook 2017, by Ubosi Eleh and Company, an estate surveying and valuation firm, optimism remains high among investors who hold that the fundamentals of the market are still strong, but if the 2016 policies continue, there will be further tightening of demand.<\/p>\n<p>The report says, the outlook for commercial real estate this year, remains gloomy. The A class developments in locations such as Ikoyi, Victoria Island and Central Area, Abuja are projected to struggle in getting tenants.<\/p>\n<p>The reasons for this are not farfetched. With the odd exception, few organisations are doing well in the current economic clime. In fact, many are contracting and reducing staff, which ironically means that these companies will even have surplus space that they are already paying for.<\/p>\n<p>\u201cUnfortunately, with the nature of leases in the Nigerian market, it could be more expensive to exit an existing lease contract than remain. Leases coming up for renewals will have their rents renegotiated downwards.<\/p>\n<p>\u201c2017 will witness a major reduction in the acceptable market rents in the A class commercial developments. Rents are projected to fall by as much as 40 per cent, if the recession bites harder and this will be all in a bid to attract tenants.\u201d<\/p>\n<p>However, the report predicts that demand for commercial zoned land for redevelopments into office buildings will remain high. \u201cInvestors will deep pockets will always strive to acquire these lands due to their limited supply for future development.\u201d<\/p>\n<p>For Class B and other commercial developments, the report said, there will be more defaults in terms of rent payments and legal actions to evict tenants as well as reduction of rents by property owners to ensure occupancy of buildings.<\/p>\n<p>On warehousing and logistics real estate market, the report envisages that many facilities will come into the market for outright disposal. Rates in Lagos have remained in the range of N1200- 1800 square feet. \u201c Some of the major industrial estates in Ikeja, Oregun, Apapa, Ilupeju in Lagos, Idu in Abuja, TransAmadi in PortHarcourt, Bompai in Kano will continue to experience low activities with many of the warehouses being converted to show rooms, event centres and locations for religious activities.\u201d<\/p>\n<p>For the residential real estate, the report projects that dollar based rental properties will continue to get realistically priced by being redenominated in naira or will have much lower dollar asking rents.<\/p>\n<p>\u201c Most landlords not wanting their properties to remain unoccupied will be ready to reduce rents and service charge to accommodate new tenants. Compromise will be made on things like 24 hours service charge, especially where poor electricity supply and diesel costs are concerned. The market for corporate tenants occupancies will continue to remain elusive.<\/p>\n<p>\u201cTo stay in business, developers will make homes smaller to lower costs. Quality will reduce drastically in terms of materials and finishing. We project a marginal 10 per cent to 15 per cent increase in rental values of flats as more people squeezed by the economy downsize from <a href=\"https:\/\/amazingproperty.com.ng\/blog\/duplex-in-ikota-lekki-phase-1-lagos\/\">duplexes<\/a> and detached <a href=\"https:\/\/amazingproperty.com.ng\/blog\/really-nice-property-for-sale-in-nigeria\/\">houses<\/a> to flats.\u201d<\/p>\n<\/div>\n<p>[ad_2]<br \/>\n<br \/><a hre=\"https:\/\/guardian.ng\/property\/nigerias-commercial-real-estate-market-outlook-still-gloomy\/\"> Guardian <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An illustration of a proposed commercial development. PHOTO: UBOSI ELEH AND COMPANY Uncertainties in the real estate industry have continued to dampen commercial property market, on the back of a turbulent Nigerian economy. And this monetary and fiscal polices largely driven by the country\u2019s macroeconomic fundamentals, stoked inflation, slowed economic growth and created a volatile [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4921,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[1009,8942,1398,1399,12908,543,127,617,489,344,684,3058,522,11049,15272,1007,41,140,818,84,1429,2878,678,907,3053],"class_list":["post-4920","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-commercial-real-estate","tag-detached-house","tag-developers","tag-development","tag-home","tag-home-buying-guide","tag-homes","tag-house","tag-houses","tag-housing","tag-lagos","tag-location","tag-nigeria","tag-ny","tag-outlook","tag-owners","tag-property","tag-property-market","tag-real","tag-real-estate","tag-real-estate-industry","tag-real-estate-market","tag-rental","tag-tenant","tag-tenants"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":8017,"url":"https:\/\/amazingproperty.com.ng\/blog\/forum-on-real-estate-investment-opportunities-holds-in-lagos\/","url_meta":{"origin":4920,"position":0},"title":"Forum on real estate investment opportunities holds in Lagos","author":"Amazing Property","date":"February 5, 2018","format":false,"excerpt":"\u00a0 Towards providing guides to investors on strategic opportunities in the realty sector, foremost realty brand, specializing in providing a premium service, Messrs Fine and Country in collaboration with Business Day and Lagos Business School is convening the fifth edition of the economic and real estate outlook series. 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They expect continued appetite for prime commercial real estate in 2018 with investors increasingly focused\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/Mixta-Real-Estate.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/Mixta-Real-Estate.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/Mixta-Real-Estate.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/Mixta-Real-Estate.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/02\/Mixta-Real-Estate.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":7958,"url":"https:\/\/amazingproperty.com.ng\/blog\/experts-forecast-real-estate-sub-sector-as-investor-hub-in-2018\/","url_meta":{"origin":4920,"position":2},"title":"Experts forecast real estate sub-sector as investor hub in 2018","author":"Amazing Property","date":"January 30, 2018","format":false,"excerpt":"By\u00a0Kingsley Adegboye Experts in real estate sub-sector of the nation\u2019s economy have identified the sub-sector as one of the potential revenue drivers for the Nigerian economy in 2018. 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Governor, Central Bank of Nigeria (CBN), Mr Godwin\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"Godwin Emefiele4.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/10\/Godwin-Emefiele4.jpg?fit=412%2C250&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/Ubosi-12-06-2017.jpg?fit=1280%2C721&ssl=1","_links":{"self":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/4920","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/comments?post=4920"}],"version-history":[{"count":0,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/4920\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media\/4921"}],"wp:attachment":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media?parent=4920"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/categories?post=4920"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/tags?post=4920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}