Lagos State lost an estimated N300 million in revenue as of March 2020, due to decline in demand for Co-working spaces, as work from home (WFH) has become the new normal among organisations, a report by Northcourt Real Estate Research, has revealed.
Lagos State has the highest number of COVID-19 cases and has lost a lot in revenues due to the stringent lockdown and restrictions imposed on it to curtail the spread of the virus in the state.
However, the report stated that working from the office (WFO) has quickly switched to WFH and this has reduced the use of office space, with corporate head offices mandating that as much of 90 per cent of their staff work from home, a situation, it said, would influence future demand.
The Real Estate Market Review for first quarter of 2020, presented by the Chief Operating Officer, Northcourt Real Estate Research, Ayo Ibaru, stated that the spread of COVID-19 has forced companies to adjust their operations to protect their workers and stay in business.
It stated that the introduction of hygiene protocols has become mandatory, adding that co-working has been crippled by lockdown restrictions, social distancing rules adopted to curtail the spread of COVID-19.
"Lagos, with the largest concentration of co-working spaces in Nigeria (over 60 per cent) and a leading part of Nigeria's co-working sector, is estimated to have lost N300million in revenue as of March 2020," the report said.
The report stressed that digital networking events has taken over the place of physical meetings, adding that the focus has shifted to providing more support for members over the standard space and physical resources.
According to the report, "Co-working spaces will face challenging seasons ahead as the world conforms to the new conditions for doing business. Corporate Nigeria has kicked the execution of remote working strategies into high gear - with some head office complexes emptied of 80 - 90 per cent of their staff. Corporations will be looking for flexible solutions that further employee health and wellbeing best practices.
"As large organisations optimise their operations post-COVID, co-working spaces will serve as a welcome alternative. The adoption of remote working post-pandemic is likely to increase, encouraging work from close-to-home co-working spaces where residences are not conducive enough.
"Co-working spaces would need to attract and keep larger, more established clients looking to optimize administrative costs. Companies will set up a more distributed workforce to better manage employees working from different locations. But research from the American Psychological Association posits that mental health issues are likely to rise."
For the industrial sector, the report revealed that the rise in demand for warehousing and logistics since the lockdown had only bolstered investor interest, predicting that Post-COVID, e-commerce, demand and supply chain disruptions would continue to support this rise.
It stated that the extended lockdown measures, export and travel bans had resulted in declining utilisation rates.
It said, "Residential real estate remains the mainstay of Nigeria's real estate market. Land is also in demand and may remain the real estate investment that is recession-proof. Still, the inability to carry out online title verification and registration hinders the growth in transaction volume."