The Lagos State Government may have finally terminated the controversial Falomo Shopping Mall project being developed by Afriland Properties formerly known as UBA properties.
An Expression of Interest (EOI) advertised today by Lagos State and signed by Professor Ademola Abass a special Adviser to the Governor of Lagos State, says
A. FORMER FALOMO SHOPPING COMPLEX
“Lagos State Government is seeking proposals under PPP model on how this site can be redeveloped. The project must be a world class residential condominium complex with a full complement of lifestyle enhancing facilities and complete communities Direction Strategy. The site is intended to be developed as a low density, mixed use residential development that will include the integration of the multi use nature of the area.”
Now while this is all well and good for Lagos Sate, the questions that arise is what does this mean for Afriland Properties and their shareholders?
Afriland Properties PLC and the Lagos State Development Property Corporation (LSDPC), acting on behalf of the Lagos State government, had earlier 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 would have received a 35% interest in the SPV for its land contribution.
A statement released in August 2015 and signed by Uzo Oshogwe, MD/CEO Afriland Properties Plc, said:
“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 was to comprise a state-of-the-art shopping mall, office complex and generous parking facilities.
It remains to be seen how much Afriland properties has committed to this project, whether they will be compensated by the Lagos State Government, and if this will deter investors from partnering with the State Government in the future.
Sources tell Nairametrics that the new Government of Akinwunmi Ambode raised concerns that the concession terms signed by former Governor Fashola were “grossly detrimental” to Lagos State and its residents.