Fresh fears over Lagos Island CBD high-rise commercial property as fortunes dip
More than a decade after Lagos authorities restored sanity to the changing commercial real estate values in the heart of the Lagos Island business district, some of the property owners are yet to recover from the exodus of tenants from the city.
Once the cynosure of all business activity in the country, the Lagos Island Central Business District (CBD) fell into decay, prompting massive net outflow of corporate tenants from the high-rise towers that were the pride of the city.
Then, it costs more to maintain services than actually rent the space. This is because service charges cost as much, or sometimes higher than the actual rents on some properties.
The intervention of the state government through large scale Island Central Business District Revitalisation/Marina City Project restored hope to the area. The perennial traffic gridlocks, extensive parking problems, and the ubiquitous menace of the social miscreants otherwise known, as Area Boys have also become a thing of the past in the favoured commercial district.
Exactly 12 years after the mass migration from Central Lagos towards Victoria Island, Ikoyi, Lekki and Ajah, as well as other areas on the Mainland like Illupeju, Ikeja and Ikorodu Road, property owners still await tenants as vacancy rates have continued to increase in some of the high-rise buildings.
As the waiting continues, office spaces per square metre on Lagos Island, which in some areas goes for N40, 000 per square metre, has dipped to as low as N15, 000 per square metre yearly as pockets of property appears in run down condition. However, some well maintained buildings command up to N30, 000 per square metre.
The General Secretary, International Real Estate Federation (FIABCI) Nigeria, Mr. Gbenga Ismail, told The Guardian that “Central Lagos has not recovered from the blight that affected it many years ago. Once rent drops and voids increase, maintenance will be affected.”
Investigation revealed that some popular buildings along Marina and Broad Streets are becoming a shadow of themselves such as NITEL buildings and the moribund Savanna Bank building, the LASACO house and several others.
Most of the buildings have combination of neglect, poor maintenance and a confused regulatory framework, which has left some buildings lacking even basic protection, such as functioning fire doors to seal off emergency staircases.
Experts believe that hundreds of high-rise tower in Nigeria have inadequate fire protection and risking a potential repeat of Mamman Kontagora House incident. The building owned by the Federal Mortgage Bank of Nigeria (FMBN) is now undergoing a makeover.
The Managing Director, 1004 Estates Limited, Lagos, Mr. Samuel Ukpong explained that the failure to properly respect the specialist nature of services and the ravages of the epileptic power supply have a high damaging impact on high rise buildings, adding that the challenges revolve around poor technical skills in the economy as few companies are really competent to manage the utilities and usually overstretched to attend to clients.
Ukpong stated that proper funding of the repairs and replacements to the service infrastructure of high-rise buildings is becoming increasingly difficult due to the high foreign exchange costs, as they are all imported.
He advised that tenant cooperation is also vital to ensure that regular and timely payments are received to fund the cost of the services. “The trend today is for automated building services and building management systems, which lead to green buildings certification. This typically involves the latest innovations in building technology, which assist building temperature management, power and electricity management, water conservation, water and sewage recycling.”
He lamented that the nation lacked enough trained manpower in the facility management industry with the specific training for the full exploitation of the benefits of facility management and called for local training in that regard.
Another facility management expert, Dr. Mohammad Balogun, believed that most of the buildings were in the present stage because of ignorance on the part of the owners.
According to him, people do not understand the value of properly managed buildings as buildings that are not properly managed can’t attract the right value and rentals.
Dr. Balogun, who is the Managing Director and Chief Executive Officer of Global Property and Facilities International Limited, stressed that most buildings are not well manage because their owners see maintenance as more of cost than investment without knowing that it is an investment in capital and rentals.
The attitude, he said, is a mixture of culture and ignorance because many people did not understand the importance of maintenance, the rental value they intend to get will be lower, if it is not well maintained.
On why some of the buildings that have facility managers are not properly maintained, he said it is either the facility manager does not understand the rudiments or the owner does not want to spend money on the building.
He called for continuous education for property owners on the need to maintain and invest in their buildings. “There is also need to continue to give facility managers proper education on maintenance of building because of the grave danger that such building portend to the environment”, he added.