Lagos ranked 12th most expensive city in the world to launch a startup

by | Aug 9, 2016

Lagos is undoubtedly one of the most expensive cities in Nigeria, especially when it comes to finding offices and residential accommodation.

Interestingly enough, a recent report from Savills ranks Lagos as the 12th most expensive city in the world for startups to rent and occupy office space and housing for their employees.

The Savills report Live-Work Index report compares how much it will cost for businesses with a 7- person strong staff (typical of a regular startup) to set up in major cities around the world by measuring the annual cost of renting and occupying both home and office space per employees.

How the cities ranked

The report puts the annual cost per employee at $45, 817.89, which interestingly makes Lagos appear 27% more affordable for internationals. However, considering that local real estate prices are denominated in naira, this has an increasing effect on Lagos residents as it means that they will have to exchange more naira to match the dollar equivalent. The city of New York tops the list at $114,009.57 annual cost per employee. Other cities ranked as follows

  1. New York City, US — $114,009.57
  2. Hong Kong — $100,984.26
  3. London, UK — $100,141.30
  4. Tokyo, Japan — $85,331.53
  5. Paris, France — $82,880.61
  6. San Francisco, US — $66,268.65
  7. Singapore — $61,335.24
  8. Dubai — $53,913.42
  9. Sydney, Australia — $50,768.12
  10. Los Angeles, US — $50,215.30
  11. Miami, US — $49,946.99
  12. Lagos, Nigeria — $45,817.89
  13. Chicago, US — $45,456.61
  14. Dublin, Ireland — $45,147.20
  15. Moscow, Russia — $43,966.29
  16. Shanghai, China — $42,577.81
  17. Berlin, Germany — $29,933.07
  18. Mumbai, India — $28,592.46
  19. Johannesburg, South Africa — $20,905.43
  20. Rio de Janeiro, Brazil — $19,188.89

The activity, according to the report, is believed to have spearheaded a fall in both office and residential accommodation in Lagos.

Dubai and Moscow have also experienced a fall in the demand for rent just like Lagos, but their real estate is denominated in dollars, or related currencies and as such, not affected by currency movement against the dollar. New York ranks first on the list with an annual cost per employee of $114,009,57, while Rio de Janeiro in Brazil is ranked as the 20th most expensive city with an annual cost per employee estimated at $19,118.89.

It remains to be seen if this trend would have any long term negative impact on local startups who wish to acquire new office space for the team or employees. But it’s worrisome all the same if foreign occupiers can easily afford office rent in Lagos while local occupiers cannot or will have to pay through their nose to.

Ifeanyi Ndiomewese
Ifeanyi Ndiomewese

Ifeanyi is a desk reporter-turned administrator. Outside of work, I love to read and travel.

On January 22, 2022, be part of the largest gathering of innovators, startup founders, thinkers, programmers, policymakers, and investors in West Africa. Register free.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Recent News

Subscribe to Techpoint Digest!

A daily 5-minute roundup of happenings in African and global tech, sent directly to your email inbox, between 5 a.m. and 7 a.m (WAT) every week day!

Please check your email to confirm your subscription.

Subscribe to Crypto Explorer

A monthly series featuring in-depth analysis on the cryptocurrency sector in Africa

Please check your email to confirm your subscription.

Subscribe to The Experts

A bi-weekly where tech career specialists take us on their journey from newbie to expert, and how they became successful in the industry.

Please check your email to confirm your subscription.

Subscribe to Founder's Table

A monthly series, where we catch up with founders in the startup ecosystem, learn about their failures, successes and a few tricks of the trade

Please check your email to confirm your subscription.

Copy link
Powered by Social Snap