The Nigerian Real Estate Market report has stated that the increasing numbers of offices in the country was largely due to remote working which has reduced the strength of the co-working spaces to Covid-19 disruption.
It also predicted that the fall in household consumptions will persist as long as more offices and shops continue to remain vacant. The survey stated that the enforcement of social distancing rules and lockdowns on offices and shops which was implemented to curb the rising cases of covid-19 caused a major disruption to the co-working sector.
The survey conducted by North Court Real Estate Advisory, stated that co-working is one of the high growth areas in Nigeria’s real estate sector which was crippled by lockdown restrictions, social distancing rules adopted to curtail the spread of COVID-19 pandemic.
The report explained that there is a decline in the utilisation of office spaces as more businesses reassess their space requirements, profit margins, capital formation, market visibility and penetration on the supply side of the business due to the Covid-19 pandemic.
The report reviews the performance of Nigeria’s real estate market in the first six months of 2020, taking into consideration key economic indicators of regional influences, and the COVID-19 pandemic.
The report also indicated that the nation’s capital is taking a more capitalist approach to property use. For, instance, Lagos, with the largest concentration of co-working spaces in Nigeria (over 60 per cent) and a leading part of Nigeria’s coworking sector, is estimated to have lost N300 million in revenue as of March 2020.
It also indicated that on March 20, one of the country’s pioneer coworking spaces, CCHub, suspended activities until further notice. Lead Space also announced that its hubs would be closed due to social distancing restrictions.
The chief operation officer and director, Real Estate Research in North Court, Ayo Ibaru, said the pandemic was also a nightmare of sorts – especially for Grade A malls were significantly reduced footfall, closed stores, and limited opening hours have become the norm.
Consequently, a few line stores closed due to the reduced demand that made it difficult to balance operational costs with revenues, thereby offering local retailers the opportunity to introduce retail/mixed-use projects.
In all, pent up demand is expected to find expression as analysts suggest that the fall in household consumption will persist as long as more offices and shops continue to remain vacant.