Could COVID-19 lead to an increase in demand for office space in the Lagos suburbs?

A 2017 study of the most stressful cities in the world placed Lagos in Nigeria at number 3, after Kabul in Afghanistan and Baghdad in Iraq. This study was based on a number of quality of life factors that included traffic levels and physical and mental health. Lagos, Nigeria’s most overcrowded city with a population of over 20 million people scores very lowly on both. With an average of 30 hours spent in traffic each week and the associated noise and environmental pollution that comes from 5 million vehicles navigating their way through an inadequate network of 9,100 roads every day, it is no wonder that Lagosians are stressed.

Most of the Lagos workforce lives on the Lagos mainland where property prices are generally lower than other parts of Lagos. They wake up as early as 4AM to begin their nightmare journey to work in the more expensive areas of Ikoyi and Victoria Island where major businesses are located. The same nightmare journey is repeated on the way home. In many instances employees stay late to wait for the traffic to ease before attempting the journey back.  That means even longer days in the office coupled with less sleep.  All of this can put an intolerable toll on the mental wellbeing and productivity of employees.

Lagos traffic jams costs the city’s economy an estimated $30.5million monthly in lost productivity. COVID-19 has forced businesses to close their offices during the lockdown period and implement business continuity plans that require employees to work from home.  As lockdowns are being eased globally, the question becomes whether given the negative impact of the Lagos commute on employee productivity and mental health, a return to the office in Ikoyi and Victoria Island is in the best interests of your organization?  Is it time to reassess your real estate strategy in favour of cheaper locations in the suburbs nearer the homes of your workforce? What do you want to do with your existing workspace in Ikoyi and Victoria Island? Do you going forward recalculate your space requirements based on employee home location and work preferences?

There is no doubt that a shorter commute to work will undoubtedly have a positive impact on productivity and health for many employees.  It will also lead to a better work life balance that reduces time spent in traffic or in overcrowded public transport. Companies should always put the wellbeing of their workforce at the heart of their real estate strategy. That has become even more apparent with the arrival of COVID-19.

Templetons Realty is a provider of Tenant Representation services to corporate clients in the Commercial Real Estate Market in Nigeria.