Renting Restaurant or Lounge Space in Lagos: What to Check Before You Sign
A restaurant or lounge is one of the hardest businesses to move once it opens. You spend heavily on the kitchen, extraction, bar, seating and finishes, and your customers learn to find you at one address. Choosing the wrong space is expensive. Before you lease a restaurant, bar or lounge in Lagos, check these things.
1. Location and how people will reach you
For food and nightlife, the right street matters more than the building. Victoria Island and Lekki Phase 1 lead the market, with Admiralty Way, Adeola Odeku, Akin Adesola and the Oniru waterfront among the most sought-after addresses.
Ask yourself:
Can people see you from the main road, or will they need directions?
Where will your guests park, and how many bays come with the space? In Lagos, a restaurant with no parking loses evening trade.
What do the neighbours do? A lounge next to homes can attract noise complaints. Ask the landlord about any past disputes.
Who comes past at your busy hours? A lunch spot needs offices nearby. A lounge needs a crowd that goes out at night.
2. What the space costs, and what you are actually paying for
Restaurant and lounge space in Lagos comes in three forms, and each is priced differently.
A shell or empty unit. You pay rent only, but you fund the whole fit-out yourself.
An equipped or serviced space. The kitchen, extraction and some furniture are already in place. On CW's current listings, serviced restaurant and lounge space in Victoria Island starts around ₦10 million a year, and a fully equipped restaurant in Lekki Phase 1 asks about ₦20 million a year.
A running business. Some owners sell an operating restaurant, lounge or bakery with its equipment, fit-out and sometimes its brand. These cost far more, often tens or hundreds of millions of naira, because you are buying the business as well as the space.
Always ask which one you are being offered. If there is a takeover or goodwill fee on top of rent, find out exactly what it covers and get a list of the equipment that stays.
As with any commercial lease, add service charge, agency and legal fees, and any VAT or withholding tax, and plan for one or two years of rent upfront.
3. Kitchen, extraction, gas and waste
This is where most hidden costs sit. Before you agree terms, have a kitchen contractor inspect the space and confirm:
Whether there is a proper extraction system, and where the duct exits the building. Smoke and smell can lead to complaints and orders to shut down.
Gas supply and storage, and whether the setup is safe and approved.
Drainage and a grease trap, so kitchen waste does not block the building's system.
Where refuse is stored and how it is collected.
The floor loading if you plan heavy equipment, cold rooms or a large bar.
4. Power, water and cooling
Restaurants use far more power than offices. Ask how many hours the generator runs, whether you can install your own, who buys the diesel and how your usage is metered. Check the water source and treatment, and whether the air conditioning can cope with a full room and a hot kitchen.
5. Permits and approvals
Make sure the building is approved for food and drink use before you pay anything. Many commercial spaces in Lagos are converted houses, and a building without the right approval can be sealed. Ask your lawyer to check the approved use.
Also plan for the permits your business needs to open, such as food handling, health and safety, fire safety, signage and, for lounges, the right licence for alcohol and late opening. Ask the landlord what the previous tenant held, but do not assume their permits transfer to you.
6. Lease terms that protect your fit-out
A restaurant fit-out can cost as much as several years of rent, so the lease must give you time to earn it back.
Ask for a long enough term, with a right to renew.
Agree a cap on rent increases.
Negotiate a rent-free period while you fit out. Two to three months is a reasonable ask.
Confirm your opening hours, music and outdoor seating are allowed in writing.
Agree what happens to your equipment and improvements when you leave.
Before you sign
Visit the space at the time you expect to be busiest, talk to nearby businesses, and have a property lawyer review the lease and any takeover agreement.
Looking for a restaurant, lounge or bar space? Or have one to let? Talk to Nadi, Jennifer or Itohan, our commercial specialists, or browse current restaurant and lounge listings at cwlagos.com/commercial.
A restaurant or lounge is one of the hardest businesses to move once it opens. You spend heavily on the kitchen, extraction, bar, seating and finishes, and your customers learn to find you at one address. Choosing the wrong space is expensive. Before you lease a restaurant, bar or lounge in Lagos, check these things.
1. Location and how people will reach you
For food and nightlife, the right street matters more than the building. Victoria Island and Lekki Phase 1 lead the market, with Admiralty Way, Adeola Odeku, Akin Adesola and the Oniru waterfront among the most sought-after addresses.
Ask yourself:
Can people see you from the main road, or will they need directions?
Where will your guests park, and how many bays come with the space? In Lagos, a restaurant with no parking loses evening trade.
What do the neighbours do? A lounge next to homes can attract noise complaints. Ask the landlord about any past disputes.
Who comes past at your busy hours? A lunch spot needs offices nearby. A lounge needs a crowd that goes out at night.
2. What the space costs, and what you are actually paying for
Restaurant and lounge space in Lagos comes in three forms, and each is priced differently.
A shell or empty unit. You pay rent only, but you fund the whole fit-out yourself.
An equipped or serviced space. The kitchen, extraction and some furniture are already in place. On CW's current listings, serviced restaurant and lounge space in Victoria Island starts around ₦10 million a year, and a fully equipped restaurant in Lekki Phase 1 asks about ₦20 million a year.
A running business. Some owners sell an operating restaurant, lounge or bakery with its equipment, fit-out and sometimes its brand. These cost far more, often tens or hundreds of millions of naira, because you are buying the business as well as the space.
Always ask which one you are being offered. If there is a takeover or goodwill fee on top of rent, find out exactly what it covers and get a list of the equipment that stays.
As with any commercial lease, add service charge, agency and legal fees, and any VAT or withholding tax, and plan for one or two years of rent upfront.
3. Kitchen, extraction, gas and waste
This is where most hidden costs sit. Before you agree terms, have a kitchen contractor inspect the space and confirm:
Whether there is a proper extraction system, and where the duct exits the building. Smoke and smell can lead to complaints and orders to shut down.
Gas supply and storage, and whether the setup is safe and approved.
Drainage and a grease trap, so kitchen waste does not block the building's system.
Where refuse is stored and how it is collected.
The floor loading if you plan heavy equipment, cold rooms or a large bar.
4. Power, water and cooling
Restaurants use far more power than offices. Ask how many hours the generator runs, whether you can install your own, who buys the diesel and how your usage is metered. Check the water source and treatment, and whether the air conditioning can cope with a full room and a hot kitchen.
5. Permits and approvals
Make sure the building is approved for food and drink use before you pay anything. Many commercial spaces in Lagos are converted houses, and a building without the right approval can be sealed. Ask your lawyer to check the approved use.
Also plan for the permits your business needs to open, such as food handling, health and safety, fire safety, signage and, for lounges, the right licence for alcohol and late opening. Ask the landlord what the previous tenant held, but do not assume their permits transfer to you.
6. Lease terms that protect your fit-out
A restaurant fit-out can cost as much as several years of rent, so the lease must give you time to earn it back.
Ask for a long enough term, with a right to renew.
Agree a cap on rent increases.
Negotiate a rent-free period while you fit out. Two to three months is a reasonable ask.
Confirm your opening hours, music and outdoor seating are allowed in writing.
Agree what happens to your equipment and improvements when you leave.
Before you sign
Visit the space at the time you expect to be busiest, talk to nearby businesses, and have a property lawyer review the lease and any takeover agreement.
Looking for a restaurant, lounge or bar space? Or have one to let? Talk to Nadi, Jennifer or Itohan, our commercial specialists, or browse current restaurant and lounge listings at cwlagos.com/commercial.
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