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Afriland Properties Reacts To Alleged Cancellation Of Falomo Market Concession

Information making the rounds suggest that the Lagos state government has terminated a concession agreement with Afriland Properties PLC over the development of the Falomo market.

Several newspapers report that that Afriland Properties Plc only made a payment of N50 million for a 50-year lease of the government-owned land.

However, Afriland properties Plc has refuted this claim and in a press statement today denied knowledge of the cancellation of the said contract. According to the statement, “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 (fifty million naira) 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 state-of-the-art shopping mall, office complex and generous parking facilities.”

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