Home » News » Falomo Complex: Concessionaire Faults Ambode On Terms

Falomo Complex: Concessionaire Faults Ambode On Terms

Afriland Properties Plc Which Entered Into A Concession Agreement With Lagos State Property Development Corporation Over Falomo Shopping Complex Denies That It Got The Property For N50m Only

Concessionaire in the Falomo Shopping Complex re-modeling and redevelopment contract, Afriland properties Plc, yesterday said it was not true that it paid only N50million for a 50-year lease holding on the property.

In fact it said the N50million paid to the Lagos State Property Development Corporation (LSPDC), was only an expression of interest fee, and not the value of the contract.

Explaining details of the concession agreement in a statement made available to The UNION yesterday in Lagos, Afriland Properties said the contract is valued at over N30 billion. It said the company was granted a concession to, amongst other things, develop, build, operate and maintain the Project on a Build, Operate and Transfer (BOT) basis through a special purpose vehicle created for the project.

It said that though Lagos State was guaranteed 35 percent interest through the special purpose vehicle, the project would be executed at no costs to Lagos state.

The statement signed by Managing Director and Chief Executive Officer of Afriland Properties Plc, Uzo Oshogwe, reads: “The management of Afriland Properties Plc notes with concern, recent reports relating to its transaction to redesign and redevelop the iconic Falomo Shopping Centre in Lagos.

“These unverified reports have implied that, the contract with the Lagos State Development and Property Corporation (LSDPC) was terminated on the grounds that the concession terms are “grossly detrimental” to Lagos State and its residents. The reports also claim that Afriland Properties Plc only made a payment of N50 million for a 50-year lease of the government-owned land.

“Though the authenticity of these reports is unconfirmed, Afriland strongly refutes the suggestion that it has engaged in any misconduct or that the transaction is in any way detrimental to the people and government of Lagos State. “We are strongly committed to creating a world class project, which will act as an economic magnet for central Lagos, creating opportunities for Lagosians and which crucially has been structured to ensure ongoing value will accrue to Lagos State and to Lagosians.

The contract was negotiated transparently and in accordance with best practice. “Afriland Properties PLC and the Lagos State Development Property Corporation (LSDPC), acting on behalf of the Lagos State government, established a Special Purpose Vehicle (SPV) which is jointly owned by the parties for the specific purpose of developing the Falomo project.

“Under the terms of the agreement, the SPV- Falomo Shopping Centre Development Company Ltd – was granted a concession to, amongst other things, develop, build, operate and maintain the Project on a Build, Operate and Transfer (BOT) basis. “Afriland paid N50m to LSDPC as an expression of interest in the redevelopment project.

“The LSPDC will receive a 35% interest in the SPV for its land contribution and through this significant Equity Holding, will continue to receive significant ongoing value.

“Afriland is obliged to fund the entirety of the development costs which is projected to exceed N30 billion without recourse to the Nigerian taxpayer.

“The new facility will comprise a stateof- the-art shopping mall, office complex and generous parking facilities. “Afriland has consistently adhered to the terms of its agreement with LSDPC, as outlined in the Memorandum of Understanding (MoU) and Joint Venture Agreement that were signed and executed by the aforementioned parties.

“Furthermore, all value to be derived from the creation of this world-class commercial venture will be held in, and enjoyed by Lagos State and its residents.

The development will ultimately revert to the state upon expiration of the lease. “Apart from delivering an environment that befits the city and is consistent with the government’s goal of an aesthetically pleasing skyline, the Falomo site will be home to thriving businesses that will contribute significantly to the Internally Generated Revenue (IGR) of the state.

“As an organization, Afriland Properties Plc and its affiliated companies have always upheld the values of integrity and excellence. We have nothing but the utmost respect for the dictates of the law and till date, have acted accordingly.

As such, we are unequivocal in our belief that our sincere intentions for this landmark project will be validated in due course. “As a significant investor in Nigeria, and one which is committed to ensuring value creation within the country, we would underline the importance of creating a business environment that is based on transparency, contractual certainty and social partnership.

At a time when Nigeria urgently needs to diversify its economy and attract broad based foreign direct investment, the rumours we have identified do little to promote the National interest or create the business environment our country needs”.


-Edward Nnachi

%d bloggers like this: