HIGH SERVICE CHARGES FORCING CORPORATES ORGANISATIONS INTO LOW-PRICED RESIDENTIAL AREAS

Faced with empty houses that no one seems prepared to rent, landlords in highbrow areas of Lagos and Abuja are now accepting six months advance rent payments as against three years which obtained previously, BusinessDay reports. Places like Garki, Wuse and Asokoro in Abuja, and Ikoyi, Victoria Island, and Lekki in Lagos, have in the past 12 to18 months seen an over-supply of houses for which there is no commensurate demand, leading to high vacancy rates. BusinessDay had earlier reported high vacancy rates in these areas and estimated the vacancy rates at between 25% and 30% in residential areas of Ikoyi and Victoria Island.

Gbenga Olaniyan, an estate surveyor who is CEO of Estate Links Limited, confirmed recently that one year rent is now the norm in the rental market but 5% of landlords are willing to accept six months advance rent payment. He pointed out that such landlords usually investigated the financial standing of the prospective tenants, apparently to prevent “low net worth” pretenders from occupying apartments, paying the first six months instalment and then living free of charge in the apartments, shielded by prolonged litigations in court. He added that demand for high-end office spaces is softening, as high service charges are forcing many organisations out of corporate office blocks.

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