Elumelu’s Afriland Properties Responds To Termination Of Falomo Shopping Centre

Elumelu’s Afriland Properties responds to termination of Falomo Shopping Centre concession agreement.

Afriland Properties Plc has been forced to respond to a statement by the Lagos governor, Akinwunmi Ambode, in which he cancelled a concession agreement between the company and the Lagos State Development and Property Corporation (LSDPC) for the redesigning and development of the Falomo Shopping Centre.


Up till now the Lagos government has not formally communicated the termination of the agreement signed between the two parties, but the news has been so widely reported that Uzo Oshogwe, the MD/CEO of Afriland Properties Plc had to put out a statement with the company’s position.

The company expressed concern over the reports, especially because the government statement claimed that the deal was “grossly detrimental” to Lagos State and its residents, and alleged that the company only made a payment of N50 million for a 50-year lease of the government-owned land.



Oshogwe said any such suggestion of misconduct on the part of the company was simply not true. According to the company, a Special Purpose Vehicle (SPV) was established between Afriland Properties and LSDPC on behalf of the state government. The SPV, which they called the Falomo Shopping Centre Development Company, is jointly owned by the two parties and the terms of the concession was that it would develop, build, operate and maintain the Falomo project on a Build, Operate and Transfer (BOT) basis.


The statement explained that the N50 million which was widely quoted as what the company paid for the concession, was actually what they paid for expression of interest and not for the entire project. Under the agreement, the company is expected to wholly fund the entire development project – which they claim would exceed N30 billion – “without recourse to the Nigerian taxpayer.” The LSPDC/Lagos government meanwhile, 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 insisted that it 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.



“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.

“The new facility will comprise a state-of-the-art shopping mall, office complex and generous parking facilities,” the statement said.

Speaking further, the company said, “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 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.”


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