Office Space Investments Drop In Lagos reports Tobin Jones

(EstateNewsWire.com, November 16, 2012 ) England, UK -- Recent research has shown that office rentals in upscale parts of Lagos have seen a significant drop in sales.

While the usual rate for these office spaces is $1000 per square meter, research proves that figure has been cut by 20% and is now down to $800 per square meter. While there is no outstanding reason for such activity, managing director Munachi Okoye of MCO Real Estate, which does a lot of work within these areas of Lagos, surmised that the drop could be due to the fact that many of their clients are foreign. WIth such a poor global economic economy at the moment, Okoye says that companies and individual contractors are focusing on profits in their home countries, and are consequently cutting back on foreign deals.

Okoye also said the drop could be partially thanks to the lack of a functional mortgage market, which would enable property owners to pay for their purchase over a period of time rather than all at once.

MOCRE not only rents to companies and contractors who need office space for living, but also sells with the purpose of convincing these buyers that such a space could also offer a long term investment opportunity. Unfortunately, because of the global financial situation, MOCRE has seen a decrease in sales.

While many other high end real estate properties are being built around Lagos including in Victoria Island and near the Lekki-Epe Expressway, Okoye believes that these will not be competitive because it takes knowledge and expertise to even explain the potential investment opportunities to potential clients, which besides MOCRE, not many companies have.

As long as corporate market businesses continue to pull back potential investments in office space in Lagos, the industry will struggle. Due to the fact that companies can simply not afford such expansions into foreign countries, businesses like MOCRE will have a harder and harder time selling such properties. Expansion projects for high-end office space has leaked to surrounding areas of Lagos, but are not expected to gain profits as long as the current trend continues.

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