Lagos purpose-built warehousing demand far exceeding supply
Occupier requirements are evolving from the traditional, owner-occupied warehousing models to now demanding purpose-built, better-quality space.
1 minute to read
Knight Frank’s Africa Logistics and Industrial Update shows Lagos has recorded its highest deficit in purpose-built warehousing.
The city's immediate demand for prime warehousing stands at 1,000,000 sqm across the south west region with supply currently estimated at 300,000 sqm.
As well as changing occupier requirements, the agriculture, manufacturing and fast-moving consumer goods sectors have remained active and continue to underpin this demand.
Charles Onyenze, Occupier Services and Commercial Agency, Knight Frank, said; We are on the cusp of achieving a vibrant industrial market in Nigeria. A flight to quality continues to drive occupier requirements, but with stock being limited, developers have had to plug this gap.
Still, access to land and low rents remain the key barriers to the growth of this sector.
Overall prime rents in Lagos remain low and declined by 45% between 2019 and 2021 to around USD $4 psm. However, with investor interest growing and supply being limited we anticipate increased rental growth in the coming years.
Already, developers such as Agility are leveraging on this opportunity with plans underway to develop 270,000 sqm of warehousing space.
Furthermore, Agbara Logistics Parks are set to develop an additional 35,000 sqm to its already existent stock. In addition, infrastructure development along the West Africa Growth Ring that links countries such as Ghana, Côte d’Ivoire and Burkina Faso is set to unleash in excess of one million sqm of purpose built prime warehousing according to our estimates. We forecast that cities such as Lagos, Accra and Abidjan are likely to be prime beneficiaries.
Image by marcinjozwiak from Pixabay