A new half-year real estate report released by Knight Frank Nigeria has shown that easing inflation, stronger construction activity and rising industrial demand shaped the performance of the Lagos property market in the second half of 2025.
The Lagos Market Update H2 2025, unveiled at a media briefing in Lagos on Monday, indicated that moderating price pressures and increased infrastructure spending helped stabilise key real estate segments, with notable shifts across office, residential, retail and industrial markets.
Speaking at the briefing, Senior Partner/CEO of Knight Frank Nigeria, Frank Okosun, said the market mirrored the broader economic direction of the country.
“The second half of 2025 presented a mixed but increasingly stable economic climate for Nigeria. Inflation eased further, construction activity outperformed the broader economy, and key public infrastructure corridors experienced renewed momentum. These developments have had a direct influence on how the Lagos property market evolved,” he said.
The Chairman/MD of Knight Frank Africa and Middle East, Mr James Lewis, during the unveiling of the report, commended Knight Frank Nigeria for consistently delivering quality research reports and providing guidance for stakeholders in the market.
The H2 2025 report revealed renewed momentum in the industrial and logistics segment, driven by improved manufacturing activity and sustained demand around Special Economic Zones.
The industrial Purchasing Managers’ Index (PMI) rose from 49.1 to 57.0, signalling sector expansion. Demand for warehouses near ports and SEZ corridors also strengthened, while occupiers outside SEZs continued to prioritise more affordable Grade B and C stock due to wide rental differentials.
During his presentation, Lead Research Analyst, Mr Daniel Fabi, explained that the office market activity showed mixed performance. While occupiers remained selective about prime spaces, decentralised business districts, such as Ikeja, recorded increased enquiries and transactions, supported by accessibility and cost considerations. The report suggests that decentralisation may continue into 2026 as businesses optimise operational costs.
In the residential market, investor interest in short-let apartments and faster-turnover projects remained strong, reflecting a growing preference for assets with quicker returns.
The report also highlights evolving tenant behaviour as developers and landlords respond with more flexible residential offerings.
Retail trends continued to be shaped by affordability and consumer proximity.
Hyper-local retail formats outperformed large traditional outlets, as neighbourhood-based stores benefitted from households adjusting to price sensitivity and convenience-driven shopping. According to Knight Frank, this shift is expected to continue in the near term.
Commenting on the wider national context, Head of Marketing and Corporate Communications, Lanre Sonubi, noted that Abuja and Port Harcourt also displayed noteworthy trends during the review period.
“Abuja recorded stable demand for serviced apartments and medium-density housing, while Port Harcourt saw moderate growth fuelled by oil and gas businesses and rising industrial activity around Trans-Amadi and Eleme,” he said. “These trends complement the Lagos findings and reflect broader market dynamics nationwide.”
The H2 2025 Lagos Market Update emphasises that infrastructure improvements across Lagos –including ongoing road, bridge and urban renewal developments — will continue to influence land values and investment appetite across emerging corridors.
Knight Frank Nigeria is a member of Knight Frank LLP, the leading independent global property consultancy, serving as its clients’ partners in property for over 128 years globally, and 60 years in Nigeria. Headquartered in London, Knight Frank has more than 20,000 people operating from 384 offices across 51 territories.
The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants.
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