One of the local realities of renting an office in Lagos is that you may need to make medium to significant infrastructure upgrades or aesthetic facelifts before moving in. This is especially true in areas like Lekki and Yaba, where a decent number of office spaces are actually residential properties repurposed as commercial offices. In many cases, landlords expect you to refit the property and bear the full cost.
On the other hand, Lagos also offers Grade A office buildings, mainly located in Victoria Island (VI) and Ikoyi. These buildings offer higher standards: professional management, parking facilities, backup power, and high-speed connectivity. But they also come with a more complex set of lease expectations and financial commitments.
Here are some of the key legal and practical considerations foreign investors should keep in mind when renting office space in Lagos:
1. Ensure the Area is Legally Designated for Office Use
Lagos operates under a zoning and land-use classification regime managed by the Lagos State Ministry of Physical Planning and Urban Development. Every area in the state is designated for residential, commercial, mixed-use, or special purposes, and the intended use of the property must align with its designation. Renting a property zoned for residential use and converting it into an office without obtaining a change-of-use approval exposes the business to enforcement actions, fines, or even demolition.
2. Fit-Out Periods
Given that many properties are not fully office-ready, it is commercially reasonable to negotiate a rent-free fit-out period, usually ranging from 1 to 3 months. This gives your team time to make necessary modifications without incurring rental obligations.
Even in Grade A buildings, tenants often need to make significant adjustments, particularly for branding, security access, or data infrastructure. A rent-free period is a standard clause in well-negotiated Lagos leases.
3. Bulk Upfront Payment Rent Structure
Commercial rent in Lagos is often payable upfront usually 2 to 3 years in advance, especially for new tenants without an existing relationship with the landlord. Although negotiable, Landlords are used to taking bulk money upfront and would often charge a premium for commercial leases.
4. Self-Servicing & Management
Outside of Grade A buildings, most office properties in Lagos operate on a self-service , self-manage model. This means tenants are often responsible for utilities like (a) power supply (typically via generators or inverters), (b) water supply, (c) security (d) Waste management, and (d) internal installation.
In Grade A properties, these services are usually centralized and billed as separate service charges, which may include diesel costs, lift maintenance, cleaning, and security. It is often critical to review the service charge clause in your lease to understand what you're paying for and what you're not.
Other Legal Considerations for Foreign Investors
In addition to lease-specific issues, foreign investors must address certain regulatory requirements before occupying an office in Nigeria:
A. NIPC Registration
All foreign-owned companies must register with the Nigerian Investment Promotion Commission (NIPC) and confirm their status as a legitimate foreign investor.
B. Business Premises Permit
This permit is issued by the Ministry of Interior and is mandatory for any foreign entity leasing or occupying office space in Nigeria. This permit helps the government monitor foreign participation in the economy and should ideally be obtained before full operational take-off.
C. Expatriate Quota & CERPAC
Businesses employing foreign staff will usually be required to apply for an Expatriate Quota, which determines how many foreign workers you can sponsor. Each foreign staff member must obtain a CERPAC (Combined Expatriate Residence Permit and Aliens Card), authorizing them to live and work in Nigeria. Failure to comply with these immigration protocols can result in fines, deportation, or revocation of company status.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
