Firm faults Lagos on 50-year lease claim

Afriland Properties Plc has faulted the Lagos State Government’s claim that it paid N50m for a 50-year lease of Falomo Shopping Centre in the Ikoyi area of the state.

The firm, which was the concessionaire of the property, said the contract was negotiated transparently in accordance with best practices, adding that the transaction was not detrimental to the people of Lagos State as claimed by the government.

Afriland, in a statement on Thursday, explained that the Lagos State Development Property Corporation, acting on behalf of the Lagos State Government, established a Special Purpose Vehicle, SPV, which was jointly owned by the parties for the purpose of developing the Falomo project.

The statement said, “Under the terms of the agreement, the SPV ─ Falomo Shopping Centre Development Company Ltd. ─ was granted a concession to develop, build, operate and maintain the project on a build, operate and transfer basis.
“Afriland paid N50m to the LSDPC as an expression of interest in the redevelopment project.

“The LSPDC will receive a 35 per cent 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 N30bn without recourse to taxpayers.

“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.”
The firm said it had always upheld the values of integrity and excellence, adding that it had the utmost respect for the dictates of the law.

“As a significant investor in Nigeria and one which is committed to ensuring value creation within the country, we will underline the importance of creating a business environment that is based on transparency, contractual certainty and social partnership.
“The information against us will do little to promote the national interest or create the business environment our country needs,” the firm added.

Source: Punch Newspaper.

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