Afriland Properties Plc, the concessionaire of the Falomo Shopping Mall has stated that the shopping mall was not leased to it for 50 years for N50 million as widely reported in the media.
In a statement released and signed by Uzo Oshogwe, MD/CEO Afriland Properties Plc, the company stated it rather signed a deal with the Lagos State Development and Property Corporation (LSDPC) to redesign and redevelop the iconic Falomo Shopping Centre in Lagos on a “Build, Operate and Transfer (BOT)” basis.
Giving the details of the transaction the company stated that “Afriland Properties Plc and the LSDPC, acting on behalf of the Lagos State government, established a Special Purpose Vehicle (SPV), which is jointly owned by the Afriland and LSDPC for the specific purpose of developing the Falomo Mall. 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 Mall on a Build, Operate and Transfer (BOT) basis. Afriland paid N50m (fifty million naira) to LSDPC as an expression of interest in the redevelopment project.”
The company also explained that under the terms of the agreement; “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, while Afriland is obliged to fund the entirety of the development costs, which is projected to exceed N30 billion without recourse to the Nigerian taxpayer, even though the ownership of the Mall will ultimately revert to the state after expiration of the lease granted Afriland Properties Plc.”
The statement noted that the Falomo Mall facility will comprise a state-of-the-art shopping mall, office complex and generous parking facilities which will be home to thriving businesses that will contribute significantly to the Internally Generated Revenue (IGR) of the state.
Afriland emphasized that it acted above board in the landmark transaction and is confident that the transaction will be validated in due course. “We are strongly committed to creating a world class project, which will act as an economic magnet for central Lagos, creating opportunities for Lagos residents 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.”
Oshogwe emphasized that Afriland, has consistently adhered to the terms of its agreement with LSDPC, as outlined in the Memorandum of Understanding (MoU) and Joint Venture Agreement between it and LSDPC.
But the company cautioned against anything that will undermine investor confidence in the country, calling the on the government to continue to create a business environment that is based on transparency, contractual certainty and social partnership to urgently facilitate the much desired need to diversify the Nigerian economy and attract broad based foreign direct investment.