ABBCON ASSOCIATES LTD PROPOSAL ON THE DEVELOPMENT OF PEARL ESTATE, LAGOS

Introduction Nigeria is estimated to be populated by one hundred and fourty million (140,000,000) People. Out of this, it has been argued that Lagos state is populated by between thirteen million (13,000,000) and eighteen million (18,000,000) people who come from all over the world. This is so because Lagos is the commercial and financial hub of Nigeria, the most populous black nation on earth. In the light of the above fact, it has been quiet a Herculean task providing suitable, decent and affordable housing to this population which continues to grow on a daily basis as a result of the influx of people who have chosen to make Lagos the place they will eke out a living. Challenge There is a challenge to: Urgently open up new terrains for housing development Meet the housing needs of the people through the provision of suitable, decent and affordable housing Encourage more people to enter into the development of housing for the populace. Attempts Attempts have been made by the Federal Government through the Federal housing Authority (FHA),the National Housing Fund(NHF),The Lagos state Government through The Lagos state Development and Property corporation, Private estate developers and many corporate entities at meeting the housing needs of the people. It is not a secret that the attempts have been no more than a scratch on the surface of the challenge. Outlook At the geometric rate at which the population of Lagos is growing, it is almost impossible to completely satisfy the housing needs of the populace. Property development companies like HFP Nig Ltd have facilitated housing schemes running into tens of thousands of units and they have sold out completely. These include: Dolphin estates,Ikoyi,which costs over N100,000,000 per unit of 4 bedroom duplex today when buying from a third party Victoria Garden city Ikota,where a plot of land sells for well over N50,000,000
Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

May fair gardens,Ibeju Lekki where a 4-bedroom bungalow uncompleted carcass sold for N21,000,000 per unit in 2004 A plot ofland in estates around Oko-Oba, Agege now goes for =N=18,000,000 This is just an example to point at the lucrativeness and profitability of housing development schemes when properly managed. Consequentially, demand for properties and property appreciation will be on the increase in Lagos State generally for a long time to come as there is over 18 million housing shortage nationwide. Lagos is by most estimates one of the fastest growing cities in the world. The U.N estimates that at its growth rate (600, 000) per annum, Lagos State will be the third largest mega city in the world by 2015 after Tokyo and Bombay. According to the World Organisation, Lagos State population is growing ten times faster than New York and Los Angeles. It is projected that within this decade, the population may hit the 25 million mark. Policy The Lagos state Government has decentralized development agencies across board hence there is the Ibeju- Lekki/Epe axis as the CENTRAL BUSINESS DISTRICT (CBD) of Lagos,Badgry axis as THE MARKETS DISTTICTS,Ikorodu as the NEW LAGOS DISTRICT to which end it has put machinery in place for the following: Ibeju Lekki corridor Free trade zone in (FZE) near Eleko beach. This is taking off this year. A Petroleum products refinery in Epe A composite development company known as Lekki Development Company The 4th mainland bridge where preliminary work has started Expansion of the access road to accommodate more traffic Another airport to accommodate that axis as it is expected to explode in commercial activities in a few years time and to reduce pressure on the existing airport facilities Etc

Ikorodu Corridor
Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

Existence and expansion of a power plant Lagos State Government mixed industries/residential scheme modeled after Ilupeju. (Another Ilupeju in the making) Existence of Lagos State Government Resettlement Centre with all the trappings of attracting more Government presence Accessibility through Sagamu, Ijebu-Ode, Lekki /Epe axis Plans underway to expand portions of Ikorodu road leading to Ikorodu proper Connection of 4th mainland bridge to that corridor Ferry services to Lagos Island Right now, discerning investors have started taking position in these new corridors through housing development schemes in the form of estates and large landed property holdings. Indeed the Lagos state Government has acquired much land in those axis, much more still exist that is free from Government encumbrance/holding. Idea We have an ambitious idea on how a housing development organization such as ours which has clout, name and integrity can carryout housing development using her goodwill and some funding support. There is a large expanse of surveyed land free from Government acquisition. This land is strategically located.Its features are: Free from Government acquisition The land is located few meters away from Lagos State Government mixed industries/residential scheme modeled after Ilupeju. (Another Ilupeju in the making) The land is located along Agbowa Sagamu road (ear-marked for dualization in the future) The land is located off a tarred road The land is within the same axis as Lagos State Government Resettlement Centre The land is located close to a 445 acres Estate owned by Hythec Investment and Management Ltd. The land is accessible through Ikorodu, Sagamu, Ijebu-Ode, Lekki /Epe corridors The land is located close to source of electricity Host community is friendly and accomodating The land is secured and assured (no omonile wahala)
Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

If we decided to acquire the whole lot we could consider the following: Do a layout covering 250 unit plots of land for sale by the Organisation to individuals who would build their own houses but whose designs will be subject to our approval. Commit 50 plots to the provision of infrastructure like : o Roads o Drainages o Street lighting o Power lines o General site fencing People would not mind buying from our Organisation because the our organisation has integrity and is not a Government scheme, which most people do not trust.Furthermore, our organisation could facilitate mortgage loans to people to buy the land from it at an interest. Profitable ventures Since the land is being worked up as a prime investment vehicle, our organisation could decide to go into hospitality business to maximize profit. Since it will retain the management of the estate, it could decide to reserve/maintain the hotels rights, water front developments, parks et-al. Other areas would include schools, hospitals and such essential services needed in a populated area.

Hypothesis 1:
Assume the land costs 300 plots will cost: If 250 plots sells out @N1 million/plot
Gross taking
N

N 200,000.00 60,000,000.00 250,000,000.00 250,000,000.00

Statutory levies say 5% of gross Infrastructure 20% Professional fees 5% of GDV Expenses Profit

12,500,000.00 50,000,000.00 12,500,000.00 115,000,000.00

75,000,000.00
135,000,000.00

Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

Hypothesis 2:
Assume each plot costs 300 plots will cost: If, 250 prototype units is built for max N4.5M each Expense
N 200,000.00 60,000,000.00 1,125,000,000.00 1,185,000,000.00

Statutory levies say 5% of gross Infrastructures say 20% of gross Professional fees 5% of GDV Gross expenses Takings: Sale of 250 3-bedroom bungalows @ N7.5M Profit

59,250,000.00 237,000,000.00 59,250,000.00 355,500,000.00 1,540,500,000.00

1,875,000,000.00

334,500,000.00

If 80% of the plot is used for development because it is an estate,we would retain additional 50 plots of land which can be used as prime commercial value plots viz;hotel,park,school,hospital
Primary Monitary Yield 21.71%

Land may cost less than N200,000 The organisation could sell at more than N1.0 million per plot, depends on the class created

Land may cost less than N200,000 The prototypes may be sold at more than N7.5 million

Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

The advantage of militancy in the Niger delta With militancy holding sway in the Niger delta, not a few oil companies have relocated their expatriate staff away from there. Destination is mostly Lagos. The criminal dimension to the crisis has made many Nigerian staff either seek for relocation or ultimately resigned and left the Niger delta, for security reasons. The case is now so bad that Snepco(Shell Nigeria exploration and production company) fly their oil rig staff daily from snake island in Lagos to and from production sites in Escravos,Erha and Bonga oil fields, all in the Niger delta. They are lodged in what Nigerdock Nigeria Plc (owners of snake island) call 100 man hostel while the rest are accommodated in Eko hotel and suites (for lack of accommodation).Nigerdock has had to turn down similar requests from all other oil companies in Nigeria because it lacks the facilities to accommodate all the requests. This submission can be authenticated. Bristow helicopters are the contractors which fly these oil company staff daily. Over 25 flights are made daily from snake island to the various locations in the Niger delta. Several oil companies and oil services organization have made attempts to secure mass accommodation for their staff at relatively short notices and only an insignificant few have succeeded. It is no secret that many companies in the oil and gas sector are buying up properties or leasing same at very attractive rates in Lagos.The demand and supply gulf is so wide that it still needs filling. We are optimistic that several corporate entities will be willing to either buy or lease accommodation in these areas if avillable.This is worthy of consideration.

A different window from the capital market We believe that this venture should attract huge investment as a sequel to the dip in the capital market. Investors as you well know are looking for a different window to channel idle funds hitherto earmarked for the capital market. This would include pension funds.

Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

Funding The funding of this project could take any of the following options: Option 1 With a loan of $3 million,our organisation could decide to make a token payment with a firm agreement with the owner/family to make up the balance over an agreed period of time. The purpose of making a fiduciary commitment is to have a lien on the land. On consummating this agreement the organisation would over a period of two working weeks produce an attractive layout and invite the general public to subscribe. With this done, the organisation would mop-up the much needed funds for further payment and developmental purpose while perfecting the necessary statutory obligations. At this stage, signboards announcing the site could be erected there to attract passersby. It is our strong belief that with aggressive adverts the organisation could mop-up funds in excess of what is needed within 3-calender months as the fund is deployed to provide the infrastructure and commence development. This belief is reinforced on the grounds of the clout, integrity, name and the goodwill the organisation enjoys. From our experience, the general public is wary of Government schemes. But a private sector organization such as ours will enjoy all the support it requires from the public. If our organisation went to all the oil companies offering accommodation within one year, these companies will willingly make reasonable down payments which will booster the projects finances.

Savings In further maximizing profit, our organisation could decide as follows: Employ young, aggressive and dynamic chartered construction professionals and put them on its payroll to design and supervise the construction of the scheme. The idea is to circumvent the huge fees the consultants would ask for their services which is generally put at 5% of the gross development value (GDV). Agency fees due to the body facilitating this scheme could be converted to properties within the scheme. The total fees payable should be converted to properties at the selling rate. So doing, the organisation would not require to payout cash.

Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu

ABBCON ASSOCIATES LTD

Recommendation Seeing the amount of development going on in that axis, there is no gainsaying the fact that the future of Lagos is that way. It is in the light of this that we recommend that you give this proposal the attention it deserves. If you feel you cannot go the entire hog of plots of land, you may consider going for half or quarter of the landmass. All in all, the idea is to make money for your organization and ours through this idea. If this proposal is attractive to you, we will be too willing to hold further consultation with you. We would equally request that you keep this information confidential so, other organisations which do your kind of business do not high jack this scheme.

Proposal on the Development of Pearl Etate, Ibeju-Lekki / Ikorodu