A new report has revealed that the long-term effects of the COVID-19 pandemic and a decade of macro-economic underperformance have reshaped occupier behaviour in Nigeria’s office market, driving businesses toward asset-light and flexible operating models.

The report, titled “Nigeria Managed Office Report” by Fortren & Company, shows that managed offices are becoming increasingly attractive to firms seeking affordability, operational flexibility, and reduced real estate exposure amid economic uncertainty.

According to the report, Nigeria’s managed office supply is heavily concentrated in Lagos and dominated by local operators converting lower-grade office buildings and residential properties into flexible workspaces.

The study notes that the shift reflects a broader move away from traditional leasing models toward “space-as-a-service” arrangements.

“With traditional offices remaining tenant-led, managed offices are poised for counter-cyclical growth,” the report stated.

Multinationals Also Occupy Flexible Spaces

Despite being dominated by SMEs, the report shows that several multinational and global brands also occupy managed office spaces in Nigeria.

These include:

• Canon

• Universal Music Group

• Spotify

• British Council

• Mauritius Commercial Bank

• Warner Music Group

This highlights the growing acceptance of flexible office models across different business sizes and industries.

Lagos Dominates Managed Office Supply

The report found that Lagos accounts for 69% of Nigeria’s managed office supply, driven by corporate demand, skilled labour availability, and capital concentration.

Within Lagos, key hubs include:

• Lekki Phase 1 (18% of total supply)

• Victoria Island

• Ikeja

• Yaba

• Ikoyi

Lekki’s growth is linked to rising residential development, lower operating costs, startup activity, and strong lifestyle infrastructure supporting the live-work-play model.

Abuja and Regional Trends

In the Federal Capital Territory, Abuja, about 40% of managed office supply is concentrated in Wuse, followed by Maitama, the Central Business District, and Gwarimpa.

Regionally, demand remains spread across Nigeria, although Port Harcourt shows higher concentration, with over 60% of demand clustered in the Greater Port Harcourt area.

Shift Away From Premium Office Stock

The report highlights that Nigeria is not lacking premium office developments, but demand is shifting away from Grade A and A+ buildings.

Despite increased supply, high rental costs and economic pressure have left many premium offices underutilised.

Occupiers are instead moving toward:

• Older office buildings

• Lower-grade assets

• Residential-to-office conversions

These options allow operators to offer more affordable pricing structures.

“In Nigeria’s managed office sector, value comes from repositioning what already exists, not building new,” the report stated.

SMEs Drive Demand, but Corporates Are Increasing

The study shows that SMEs remain the dominant users of managed offices, but demand from corporate clients is increasing.

About 48% of operators now focus on B2B services, up from 45% in 2023, reflecting growing enterprise adoption.

Key demand sectors include:

• Financial services

• Information technology

• Non-profit organisations

Indigenous Operators Dominate Market

The report notes that indigenous operators control about 91% of Nigeria’s managed office supply market, highlighting strong local participation in the flexible workspace sector.

Economic Pressures Reshape Office Demand

According to Research Director at Fortren & Company, Martin Uche, Nigeria’s office market was initially shaped by optimism in the early 2010s, driven by expectations of foreign direct investment and multinational expansion.

However, slower growth, inflation, currency devaluation, and remote work trends have significantly altered demand patterns.

He noted that oversupply in prime office segments has led to high vacancy rates, forcing landlords to offer concessions and flexible lease terms.

“Corporates are now prioritising flexibility, speed to occupancy, and balance sheet efficiency,” Uche said.

Outlook: Growth of Space-as-a-Service Model

The report projects continued growth in the managed office sector as flexibility becomes a strategic requirement for modern businesses.

It advises landlords and investors to:

• Reposition existing assets

• Improve operational standards

• Strengthen partnerships

• Adopt flexible leasing models

The study concludes that Nigeria’s managed office market is evolving into a more structured alternative to traditional leasing, driven by cost pressures and changing workplace needs.

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