Our perspective on the Lagos office market so far in 2025 is defined by a singular theme - strategic consolidation in the face of macroeconomic uncertainty. The city’s commercial real estate landscape, often a resilient indicator of corporate health across Africa, is currently navigating a period of significant macroeconomic and political uncertainty, driven by currency volatility and structural shifts. This environment is compelling large, international occupiers to aggressively right-size, divest, or exit legacy spaces, leading to a profound shift from a focus on expansive footprint to hyper-efficient, premium locations, a trend that has continued since the pandemic.

Notable occupier-led transactions in 2025, primarily downsizes and exits, reveal seven critical activities that are resetting expectations for Lagos office landlords and investors. Before we dive in, it is important to note that for a market that was largely “landlord driven” prior to the pandemic, this shift is significant and is changing the dynamics in the market. In this article, we have highlighted seven (7) major transactions and what they mean for the market.

1. The Great Oil & Gas Space Giveback: Exxon Mobil and Addax Petroleum

In September 2007, Lagos — Swiss firm Addax Petroleum offered to buy ExxonMobil's 40 percent interest in oil block 1 of the Nigeria-Sao Tome Joint Development Zone (JDZ) in the Gulf of Guinea. The supposed $77.6 million (N10bn) cash deal + 2 percent share profit in favour of ExxonMobil has led to the most seismic activity shaking the market, and one of the largest office asset transfers in the history of Lagos. This massive space giveback from the traditional Energy sector, is signaling a deep structural restructuring accelerated by global and local economic pressures. The combined impact of Exxon Mobil’s 9,000 SQM merge with Addax Petroleum’s 9,500 SQM footprint represents an extraordinary volume of prime space hitting the market. For context, the Energy sector in Lagos is a dominant occupier, with an average space of approximately 1,556 SQM per company based on the data that we are tracking. This transaction is 6-7 times that average, making them a defining moment. This activity is a clear outcome of divestment strategies, asset sales, and a general move towards operational streamlining.

2. Big Tech's Hybrid Work Downsize: Meta, Microsoft, and Cisco

The second defining activity is the aggressive right-sizing by global technology giants, cementing the shift to hybrid work as a long-term strategy in Lagos. Meta’s 5,000 SQM reduction is the headline transaction, alongside similar cuts from Cisco (1,034 SQM) and Microsoft (700 SQM). While the Information and Communication Technology sector remains robust, its footprint is evolving. These downsizes are not exits from Nigeria, but rather an optimization towards smaller, more flexible, and amenity-rich 'hub' offices. This trend signals the death of the large, traditional tech campus in favour of a regional hub model that supports collaboration and more efficient employee experience rather than day-to-day desk work.

3. Professional Services Re-evaluating Physical Footprints: The PWC Optimization

Professional services firms, which act as a bellwether for corporate activity, are executing their own spatial re-evaluation. PWC’s c.4,000 SQM exit from Landmark and their new 4,500 SQM space in FF Tower — indicates a need to align real estate costs with a demanding fee-earning environment. Firms like PWC, a listed tenant in the market, are leading a charge toward more modern, culture-baked spaces that enhance employee experience while dramatically reducing operational expenditure in expensive, dollarised buildings. This activity highlights the importance of future forward office design that prioritises hot-desking, client experience centres, and wellness facilities over traditional headcount capacity that's been the norm in the market for decades.

4. The Paradoxical Flight-to-Quality Trend

Despite the massive space consolidation, a counter-trend is emerging: The Flight-to-Quality. Across the board we are noticing a wider flight to smaller, highly secure, and amenity-rich spaces. Occupiers reducing their overall footprint are re-allocating savings to afford best-in-class buildings and space experiences. These companies are either moving to smaller spaces in more premium locations like Heritage Place, The Wings Office Complex, and Palton Morgan Churchgate Towers II or hiring leading design and build firms to build inspiring HQs for them. The 700 SQM and 1,034 SQM leases by the tech sector are prime examples of these trends: a smaller absolute space, but a larger proportional spend on quality, ensuring maximum efficiency and minimal operational disruption in a challenging environment.

5. The Mainstreaming of Flexible Office Solutions

The downsizes by multinational corporations are fueling a sharp rise in the demand for flexible office solutions. Operators like Regus, Kofisi and Africaworks, who are key players in the market, are beneficiaries. The data confirms the economic attractiveness of flexible spaces, positioning them as alternatives to traditional leases. Companies are utilizing co-working and serviced offices for project teams, disaster recovery, or simply as a 'soft landing' for their remaining workforce, treating it as an operational expense rather than a capital-intensive long-term liability. This mainstreaming of flex space as an enterprise solution is a trend that we believe will continue to shape the market in the medium to long term.

6. Supply Side Constraints Concentrating Prime Demand

On the supply side, the development pipeline itself is dictating market dynamics. The Lagos real estate market is grappling with a subdued development pipeline across multiple sectors. High costs of construction, foreign exchange illiquidity, and funding scarcity have curtailed new speculative Grade A office projects. This creates a critical dynamic: while major exits increase overall vacancy, the scarcity of new, high-quality stock means that the limited existing Grade A/Prime space will remain highly sought after. This concentrates effective demand, insulating rents and valuations for top-tier assets while further marginalising older, Grade B/C properties.

7. Macroeconomic Uncertainty as the Primary Occupier Driver

Finally, the overarching activity is the primacy of macroeconomic uncertainty in driving all occupier decisions. The volatile exchange rate, high inflation, and policy shifts mean that every lease decision is fundamentally a risk management exercise. This has forced companies to shorten lease terms, demand more flexible break clauses, and for landlords, naira rents to manage currency risk, a trend confirmed by the broader impact of economic uncertainty on market attractiveness. This activity dictates that landlords who can offer transparent, naira-denominated terms, modern building management, and clear operational stability will be the only ones capturing the limited, quality demand.

Final Thoughts

The Lagos office market in 2025 is undergoing a mature evolution. The large-scale exits and downsizes by Exxon Mobil, Addax Petroleum, Meta, Microsoft, Cisco, and PWC are not a vote of no confidence, but rather a profound recalibration. The market is polarising: the best-in-class assets are retaining value and attracting smaller, higher-quality tenants in a Flight-to-Quality, while older stock faces unprecedented vacancy pressure. The strategic insight for investors is clear: among other things, there is a need to embrace flexible space solutions to capture the new, quality-conscious enterprise tenant.

For close to a decade, we have tracked data on the office market in Lagos across both demand and supply and will be happy to support your projects or strategy. Reach out to us at team@fortrenandcompany.com for a more custom analysis or for feedback.

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