31
Nigeria’s premium office market is showing signs of resilience, as occupancy levels for Grade A office spaces in Lagos have climbed to 73 per cent, up from 65 per cent in previous years. However, rental prices in Ikoyi, one of Lagos’ prime commercial hubs, have dropped by 3.5 per cent, underscoring a mixed performance in the segment.
This was revealed in the Knight Frank Lagos Market Update for the first half of 2025, which was presented at a media briefing in Lagos.
According to the report, average rental rates for Grade A offices in Ikoyi declined from $57 to $55 per square metre per month year-on-year. Knight Frank analysts explained that this trend reflects a tenant-led market, where landlords prioritise higher occupancy rates instead of increasing rents.
Despite the decline in rent prices, the report highlighted that office activity is picking up in strategic hubs, particularly Eko-Atlantic City. The city has been attracting leading businesses due to its modern infrastructure, which includes quality road networks, strong telecommunications facilities, steady electricity and gas supply, and a sustainable design that integrates residential, commercial, and leisure spaces.
The report noted that MTN Nigeria and First Bank are both relocating their headquarters to Eko-Atlantic City. MTN has already secured a large plot of land, while First Bank has broken ground for its proposed 43-storey headquarters tower. The development follows the recent establishment of the United States Embassy’s diplomatic facility in the city, further positioning Eko-Atlantic as a transformative hub for corporate Nigeria.
The report also highlighted broader shifts in the office market, where landlords are adopting creative strategies to address oversupply and changing tenant demand. These include repurposing vacant office buildings into residential, retail, or hospitality facilities, while new developers increasingly focus on mixed-use projects. Such developments combine offices with retail shops, gyms, and leisure spaces, reflecting the growing appetite for integrated work-life environments and helping developers diversify their revenue.
Speaking at the briefing, the Senior Partner at Knight Frank Nigeria, Frank Okosun, said the Lagos property market remained a vital part of Nigeria’s economic outlook. He explained that macroeconomic reforms in the first half of 2025 had direct effects on the sector.
“In the first half of 2025, we witnessed significant reforms that stabilised the naira, a notable drop in inflation, and a renewed push for infrastructure development,” Okosun said. “These macroeconomic shifts are directly shaping real estate dynamics across the residential, retail, office, industrial, and infrastructure markets in Lagos.”
He added that the Knight Frank report captured new trends such as the growing demand for affordable housing in suburban areas like Ikorodu and Ibeju-Lekki, the rise of short-let apartments, higher absorption in Grade A offices, and the expansion of digital infrastructure through new data centres.
Also speaking, the Head of Marketing and Corporate Communications at Knight Frank Nigeria, Lanre Sonubi, said the report was designed to go beyond numbers to help stakeholders understand market implications.
“The H1 2025 edition not only presents facts and figures but also decodes the implications for investors, tenants, developers, and policymakers,” Sonubi said. “For example, while office occupancies are improving, we also note rental softening in prime areas, which is a clear sign of a tenant-led market. Similarly, in the residential sector, affordability concerns are shifting demand towards emerging locations such as Ikorodu and Ibeju-Lekki.”
Industry analysts say the Knight Frank report will provide valuable insights for investors, developers, and government policymakers seeking to balance rising demand for modern office and residential spaces with affordability and sustainability. With corporate relocations reshaping Eko-Atlantic and suburban housing demand expanding, Lagos’ real estate sector continues to reflect the broader economic changes in Nigeria,
