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The Big Read
Sunday, August 5, 2012
Sunday Mirror www.nationalmirroronline.net
Lagos Island: Where real estate market is comatose
L
agos Island is a very busy place. It is so busy that every work day, thousands of people make their way there in order to engage in their different activities. This is so much so that as early as 5.30 am on any such day, there is usually a traffic build-up that lasts till about 7.30 am. But despite the equally huge number of highrise buildings on the island that promises to absorb this population, most of the buildings are only scantily occupied. Most others, which were built exclusively for office use, today have been converted full time into shops. This is because there is a palpable lack of interest by companies to use these spaces in doing business. Even facilities developed for the purposes of hall businesses like banking lie empty. Instances abound: The Great Nigeria House, the 20-storey Financial Trust Building and the four-storey SGBN building by Breadfruit/Martins Street are just some of these empty buildings. There are others too like that, which were developed by corporation, like banks, companies and manufacturers of the back-in-the-days Nigeria. Their original occupants, SGBN, Lever Brothers, PZ Nigeria, Savannah Bank, even the old UBA are some of the companies that have completely abandoned their original places of occupancy in search of the proverbial greener pastures. Some others, who could no more cope, have folded up and gone under. Sunday Mirror investigations revealed that in most, while the first two to four storeys are occupied, the rest are empty. Some property investors with foresight have since converted their office blocks to shopping complexes to contain the growing mercantile spirit that has possessed the ‘spirits’ of these buildings. This is especially so in areas like Lagos Island, Ikoyi, Victoria Island and Ikeja. One would see the once popular SGBN’s (Societe Generale Bank Nigeria), Savannah Bank’s, ACB’s (African Continental Bank) buildings converted into clothing lines’ shop. One of such edifices is Mandilas Building on Broad Street. The four-storey building now houses Emma Plaza, a clothing line. While the ground floor up to the third floor houses the shops, the fourth floor is the company’s warehouse. The building once housed the Mandilas Motor Company, and after the company vacated in early 2000s, clothiers decided to take over. According to Don Maseratte, a clothier who also has business outlets on former SGBN building along Broad Street, the lull in the demand for office complex in the vicinity is largely due to the rise in rents, and fall in
Vacant: Defence House, TBS, Lagos
Vacant: Financial Trust Building, Lagos
office-related businesses on Lagos Island. “Most of these offices today have moved to Ikoyi and Victoria Island, even though they all started here. They had their headquarters here then. But today, the story has changed. Lagos Island is today a trading centre. That is why you can hardly find offices here. Those who invested in offices cannot make it and most converted their buildings into shops. Look around. Can anybody in his right mind open an office here again? Only we traders can use these offices for shops. Some of them (landlords) are very stubborn, that is why their buildings lie empty. Maybe one day it would dawn on them that the world is moving forward, then they would realize that the Island is now for us (traders).” Chika Mayor, a GSM phone dealer, who markets handsets close to Bristol Hotel on Martins Street, off Broad Street, told Sunday Mirror that the now moribund Bristol Hotel, famous for housing Nigeria’s founding fathers during the colonial days, used to be a business complex, after the hotel closed down. According to him, the building is jointly owned by the Martins family and WEMABOD, and due to a tussle for its ownership, the building was sealed off by the Lagos State Department of Physical Planning. The sealing was done in 2010, but even at that, the front of the building jostles with business. A security personnel, who works on Martin Street, told Sunday Mirror that several buildings on Lagos Island that were once offices today are either partially or totally empty, or are used as warehouses, or sales outlets. He cited the SGBN Build-
ing on the same street, which today is totally unoccupied. “They won’t rent out the house, that is why it is there, sealed. But the next house belonging to UBA is fully being used for trading. It has become a boutique and shoe depot”. Indeed when Sunday Mirror visited the two buildings, SGBN was under lock and key, while the UBA building next to it was fully occupied by traders. Another building, Anambra House, was also quite useless now to companies, as traders have taken over its occupation. One of the traders, who sold there, gave his name as Chinedu. He explained that he had been doing business there since 2008 and thought it was built originally for that purpose. He confessed he never knew it was actually meant for office use. Also on Breadfruit Street, one could easily cite such houses abandoned. In fact, it was so bad in one that sections of it had been converted into a canteen. Two ladies were seen upstairs cooking, while several pots sat on tables, with stoves. Another building that once belonged to Afrbank was completely empty, while another, next to it has just a branch of Ecobank downstairs. When asked why the buildings were empty, a goodnatured security man responded “Will you give them money to pay the rents?” The story is not too different at a branch of Union Bank, Marina, by Conoil Building. An old house, the six-storey house looks literally tired for want of occupancy. While most of the offices are unoccupied in the initial floors, the two top floors are virtually empty, and even the windows are falling off. Either Union Bank has refused to give out the offices for rent, or no one has shown any interest in occupying them. Further up the road is the NIPOST, Marina branch. A complex, NIPOST used to have quite a number of tenants using their space for business purposes. These include Mama Cass Restaurants, which occupied a three storey building of the postal giant. The eatery left last year, abandoning the building. Also, following the purchase of Oceanic Bank by Ecobank, a branch of Oceanic that was on the building was closed down. A typist working with the company explained to Sunday Mirror that Floors two and four of the building were once occupied by tenants to NIPOST. However, today, only about two
‘Hospitality business now the bride of many investors’ CONTINUED FROM PAGE 5 of the business and that the application were being granted based on the number of rooms and facilities the investors are bringing in. Thus, just as many investors in the high-end area of Ikoyi and Lekki are finding it difficult to cope with the prolonged lull in the sector, which has led to high vacancy ratio in the neighbourhoods, others have found investment in boutique hotel promising. Experts in recent interviews stated that
with the teeming Lagos’ population triggered by anticipated business and job opportunities, available standard hotels in Lagos remain inadequate hence the boom in their number. This is supported by the fact that most hotels in Lagos record over 70 per cent in terms of daily occupancy, making the business one of the few with high rate of returns on investment, while demand for both office and residential accommodation, especially in the highprofile ends of the cities, continues to dip.
companies are occupying some of the offices. Our correspondent sighted Heritage Chambers, a law firm occupying an office. The rest of the building, which is largely uncared for, are either empty offices, or are used for a few services. The two-storey UNTL Building on Marina too does not have a story different. Although the ground floor is largely occupied by a branch of UBA, the first floor is scantily occupied, while the last floor is empty. The other occupants of the house include Sigma Vigion, Beneks Group, Lombard Nigeria, Adroit Solutions and UNTL, which although still has its sign posts there, is no more functional. Taking our correspondent through the empty offices, an agent explained that the office spaces had been vacant for close to two years. One of the halls was a very large one, and had over ten equally large offices. The man said that banks, which used to rent such large halls, now shy away from largesized halls. “These banks seem not to have money anymore. They usually request for smaller halls. I don’t know if it’s the wind of change and they are all fastening their seat belts.” Another massive building lacking tenants is the Savannah Bank headquarters. Since the controversial grounding of the financial institution, the building has been locked up, and has never really served any use. A man told our correspondents that at a time after the bank became distressed, those in charge had started renting it out to traders. However, early last year, the traders had been ejected and the house was locked up once again. With Savannah Bank not coming on board as Nigerians had expected, the building might as well be wasting away like all the others that have been locked up. Close to UBA international headquarters, on Broad Street is another moribund three-storey building housing a branch of Keystone Bank. Apart from that branch at the ground floor, the building is completely deserted, and uncared for. Another building, also belonging to Union Bank stands next to it. Some of the glasses are broken, and consequently, the house is beginning to fall apart. Also, another totally-unoccupied building is one belonging to Edo-born multimillionaire, Chief Gabriel Igbinedion. The house is also empty with a sign “This house is not for sale.” Another indicates that whoever is interested should contact an address on the sign. Apparently, no one is. Integrated Trust Building on 61 Marina, once accommodated Intercontinental Bank is also empty. Intercontinental Bank had left early this year following the change of batons of ownership to Access Bank. Presently, it is up for letting. Another remarkable building is a massive five-storey complex whose ground floor presently houses FIRS (Federal Inland Revenue Service). It is located opposite Tinubu Square and must have belonged to the Federal Government. Apart from that ground floor, the rest of the building houses scores of Lagosians who for one reason or another are not living in proper residential houses. As one passes the house, thousands of clothes could be seen hanging outside the glass windows to dry. Rose Ubong, who sells cooked food, is one of the tenants. She confided in Sunday Mirror that she knows little or nothing about the management of the house.