VACANCY RATES ON THE INCREASE IN PRIME AREAS - REPORT
BY MICHAEL EBOH
The demand for properties in prime areas of the country has remained flat while vacancy rates have remained on the high side, says a report published by Financial Derivatives Company, FDC, Limited.
According to the report, the unattractive demand for properties and high vacancy rate were as a result of the current economic realities of the country, brought about by the economic downturn recorded in the last couple of months.
The report, however, stated that the demand for office spaces appears to be strong, especially as they are few vacant properties for commercial purposes.
The report said residential properties constituted a higher proportion of vacant houses, adding that potential buyers and tenants have re-adjusted their spending patterns by migrating from prime to more affordable areas.
The report said the shift in consumer preferences led to a readjustment in rental prices as demand for properties noticeably declined.
The report said, 'The demand for properties has remained flat due to economic constraints in the country, which has been a recent trend in the market since the aftermath of the economic downturn.
'In a recently conducted housing survey by FDC, the vacancy rate in prime areas in Lagos State was approximately 44.7 per cent. About 28 per cent of houses in some select streets of Victoria Island were recorded vacant with a majority up for lease.
'A large number of vacant houses were primarily for residential purposes. 41 per cent of total houses counted in select streets of Ikoyi were also observed to be empty.
'On the other hand, the market for office spaces appears to be strong, with few vacant properties for commercial purposes.
'The ratio in percentage of vacant commercial properties to residential was 9:35, showing a higher vacancy rate for residential properties in prime areas. Despite the decline in the purchasing power of consumers during the recession, a large percentage of the working class still prefers to have their offices in central areas, like Victoria Island.'