What Does The UBS And HSBC Exit Mean For The Office Market?

As it may be, not too much. The vacancies left behind by these two international banks, which total approximately 200sqm, are a drop in the ocean relative to Lagos’ excess supply of new unoccupied office space.
UBS Nigeria, who closed the rep office for their wealth management business during Q3:2018 (opened mid-2014), occupied approximately 141sqm of space in 1 Murtala Mohammed Drive in Ikoyi alongside tenants including McKinsey and Co., Aluko and Oyebode and Mastercard before their relocation. HSBC, on the other hand, occupied, a relatively small serviced office suite managed by Regus on the 7th floor of Mulliner Towers, also in Ikoyi.
For some context, within Ikoyi alone, Lakepoint Tower (c. 14,000sqm), Temple Tower, (15,000sqm), Desiderata (c. 5,000sqm) and Kingsway Tower (13,000sqm+) are among properties delivered in the past 24 months that are yet to secure any significant take-up. The exits from these banks are a blow to market sentiment that also reduces the option pool for landlords in search of new tenants, as leasing activity within Lagos is largely driven by relocations and growth from service office providers.
How are you thinking about these exits and the implication for the office market in Lagos?
Our Research team would love to hear from you!