Marina Quayside Strip Development Project – Intelligent City and Global Center Development – Lagos, Nigeria

Industry

Infrastructure/Financial Services/Technology

Company Type

Infrastructure/Ports/Marinas/ Transportation/Telecom/CleanEnergy/Real Estate

Location

Nigeria

Size

$27 Million

Investment Type

Equity/Debt
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Overview

Marina Quayside Strip Development Company Ltd (MQSD) is seeking $27.0 million to fund pre-development studies for a sustainable infrastructure and mixed-use project on the waterfront in Lagos, Nigeria – the largest and fastest growing city in Africa. Sponsor has contributed $24.5 million in pre-development studies, and a land concession is in process with the Federal Government of Nigeria (FGN) valued at $1.6 billion.

  • Smart urban city in Africa’s most populous city – located on 144 acres of prime real estate in Lagos Island, Nigeria
    • open ecosystem – platform for urban innovation to establish the Marina waterfront as a global hub for building new city solutions
    • intelligent city – data and digital infrastructure, commercial and residential real estate, retail, parking, public transport, road network development, renewable power production, and distribution network
    • destination in one of fastest growing tourism regions in the world – global center of inclusive commerce, entertainment, leisure, culture, history, science and tourism
  • Supported by FGN and Lagos State Government
  • World-class team to include Deloitte-West Africa/Dubai, Louis Berger, TGT, GE, ARUP and Applied Technology & Management
  • Investment vehicles for the implementation of the MQSD project
    • U.S. entity – MQSD LLC was incorporated in Delaware in 2018
    • Nigerian entity – The Marina Quayside Strip Development Company Ltd is a SPV established in Nigeria in 2014
  • Sponsor – Harris Aib Associates Ltd. (HASSO; Incorporated in Nigeria in 2000) – world-class African architectural and design team with global track record of successful innovation, and large-scale project completion
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Overview – Capital Requirements

  • Pre-Development Capital – $51.5 million
    • Investor capital – FEED Engineering Studies                                                                        $26.5 million
    • Sponsor contributed – Development, Architectural, Urban and Engineering Studies  $ 24.5 million
    • Transaction/closing fee                                                                                                              $   0.5 million
  • Development Capital – $6.7 billion
    • FGN (concession in process) – 144 acres land site                                                                $1,662.2 million
    • Phase 1 – Site Prep, Car Parks, Malls, Road and Bridges                                                    $1,600.9 million
    • Phase 2 – Site Prep, Car Parks, Malls, Transport, Piers and Utilities                               $2,329.1 million
    • Phase 3 – Skyscrapers, Transport, Road, Bridge and Utilities                                           $1,019.0 million
    • Transaction/closing fee                                                                                                               $     99.0 million
  • Waterfront Development Capital – $5.10 billion
    • Real estate – hotels, commercial, and residential                                                                  $5,000.0 million
    • Transaction/closing fee                                                                                                               $    100.0 million
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Opportunity

  • Africa’s population is predicted to quadruple from 1.19 billion in 2015 to 4.39 billion by 2100E
  • Africa’s growing, youthful population – compared to an aging population in many other regions of the world – constitutes a formidable economic market
  • Between 2018 and 2023E, Africa’s economic growth prospects are expected to be among the highest in the world
  • Key drivers of economic growth include banking, telecommunications, and infrastructure
    • African cities are advantageously positioned to adopt Smart City technologies – thus gaining a competitive edge into the mid-twenty-first century
    • major developments are expected to deliver Intelligent Infrastructure and real estate projects on the continent over the next three to ten years
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Lagos, Nigeria

  • At approximately 25 million inhabitants, Lagos is Africa’s most populous city, and its population is expected to double by 2050E
  • In 2019, Lagos was Africa’s 5th largest economy by GDP behind Nigeria (its host country), South Africa, Egypt, and Algeria
    • Lagos 2019 GDP of $136 billion represented a third of Nigeria’s economic output
    • over 50% of Nigeria’s industrial capacity is located in Lagos
  • Lagos is composed of two main areas – the Island and the Mainland
    • Lagos Island – initially a port city that originated on a collection of islands – Lagos Island, Eti-Osa, Amuwo-Odofin, and Apapa
    • Lagos Mainland – urbanization expanded to areas including Lagos Mainland, Ajeromi-lfelodun and Surulere
  • Lagos Island is its economic engine and houses its Central Business District, as well as its most affluent neighborhoods
    • exclusive areas were first developed by the British colonialists in the 19th century and have since remained Nigeria’s business and financial center
    • most of the major head offices of banks, multinationals, oil and gas, and telecommunication companies in Nigeria are located here
  • 21 Local Government Areas (LGAs)
    • Greater Metropolitan Lagos – Lagos State/Metropolitan Lagos and Ogun State LGAs
    • Municipality of Lagos – includes LGAs Lagos Mainland, Lagos Island, and Eti-Osa, etc.
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Infrastructure and Real Estate

  • Unlike the rest of Nigeria, over 90% of Lagos has access to electric power – albeit inconsistent
  • Energy and water access, sewage, transportation, and housing have been adversely affected by the haphazard development of a geographically disjointed city given the rapid urbanization of Lagos
  • Road networks and public transportation are not adequate to meet the needs of the bustling Metropolis of Lagos
  • Water transport is cost-competitive relative to the road system and requires less investment – but is under-utilized and has the potential to become an attractive mode of transportation for Lagos
  • Hotel market in Nigeria is fragmented – Lagos hotel supply has been insufficient to meet demand for many years
  • Quality hotel demand is high in Lagos – resilient and driven by corporate use and tourism
  • As the commercial center, Lagos has the highest demand for office accommodations in Nigeria – but supply of quality office space falls well short of demand
  • Lagos Island area provides essential housing for people working in the business districts of Lagos Island and Victoria Island – reducing their commitment to long commuter journeys from the mainland

Innovation and Telecommunications

  • With a youthful population, increasing smartphone penetration, and a deep appetite for entrepreneurship, Nigeria is becoming a thriving hub for innovation
  • Nigeria is one of the fastest-growing regions in the world for mobile growth, and financial technology and e-commerce companies – building services to meet a rapidly expanding market
    • indicative of market confidence in Nigeria’s innovation, it is one of Africa’s fastest growing venture capital markets – yet growth is constrained by limited internet access
  • Broadband internet penetration was only around 40% in 2020 – nearly half of Nigeria’s population has no access to consistent electric power
    • paradoxically, Nigeria exports power to neighboring countries – such as the Republic of Benin, Niger, and Togo
  • To harness Nigeria’s potential, there is great need to address the cost and quality of data, data access, and power as well as to work across regulatory boundaries for efficient implementation
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Tourism and Real Estate

  • International tourism in sub-Saharan Africa, a vital source of foreign exchange in the region, grew over 60% in just one decade, from $23.5 billion in 2009 to $38 billion in 2019
    • Nigeria is fifth in selected African countries with the largest international tourism receipts in 2019, with $1.45 billion
    • tourism and the hotel market in Nigeria is fragmented – no national classification or licensing system in place
    • Lagos city’s hotel supply has for many years been insufficient to meet demand
    • Lagos hotel and residential markets attract a great deal of corporate demand, with so many expatriate staff on one- and two-year contracts- however, there is insufficient supply of serviced-apartment accommodations
  • Nigeria’s real estate market has expanded rapidly, continuing a decade-long upward trend fueled by rising per capita incomes, steadily increasing foreign direct investment (FDI), fast urbanization, and strong corporate demand
    • Nigeria’s real estate sector is valued above $39 billion with annual growth near 10%
    • local and foreign developers have carried out a large number of projects in recent years – but supply in most segments is insufficient to meet demand
    • Nigeria’s growing reputation as a major player in Africa and gateway to the sub-Saharan region have fueled strong demand for A-grade office space
    • in 2019, Nigeria recorded the largest take-up in the A-grade market in the last five years, substantiating the ever-surging demand
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Solution/Strategy

  • Marina Quayside Strip Development (MQSD) Project will transform the Lagos Marina Quayside into an “intelligent city” and world-renowned global center of business, entertainment, leisure, culture, commerce, history, science and tourism
    • reliable access to data, consistent power, and affordable and world-class real estate, the Marina Quayside neighborhood to attract startups, corporations, retailers, and dreamers
    • connection point for the city and the waterfront, lagoon and land
    • creation of 5 million jobs – 1.5 million within the first three years of construction, and another 2.5 million within the first four years of operation
    • establishment of up to 25,000 Small and Medium Scale Enterprises (SMEs)
  • Pre-Development is the step before Development of detailed engineering design
    • completes necessary requirements to satisfy the final award of the FGN Concession of site land and rights-of-way
    • already achieved Compliance Certificate
    • production and submission of Masterplan drawings on Building, Site, and Waterfront Design and Engineering; Environmental & Social Impact Assessment (ESIA);  Traffic Impact Assessment (TIA); Consultative Stakeholder Plans; Resettlement Plans; and other requisite studies and reports; and legal and financial business cases
    • budget cost estimate required for the Development detailed engineering design
  • Retail, parking, corporate, and residential real estate, waterfront piers for lease, and an open ecosystem for innovation
    • 35 million square feet (SF) of prime corporate and residential real estate
    • 4.5 million SF of paid parking garage spaces
    • 5.0 million SF of retail real estate
    • 30 Piers and 75 acres of waterfront plots – leasing to 3rd party developers
    • 600,000 SF of rooftop innovation hubs, shared working/event spaces
  • Structural transformations in mobility through transport infrastructure development
    • nexus of arterial road networks – ingress/egress ramps and feeder lanes to/from Eko Bridge
    • roads leading to/from the former three-lane Marina Street into a six-lane boulevard, lined with dwarf palm trees
    • link the new car park blocks (CPB), shopping malls, and loading/delivery bays
    • develops Ring Road into a six (6) lane Royal Harbor Road — which borders thirty piers and waterfront — becoming eight lanes during construction
    • facilitate berthing of 20% minimum of piers for global cruise lines and other navigational infrastructure
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Support by Federal Government of Nigeria (FGN)

Concession Agreements in Nigeria

  • Concession Agreements in Nigeria involve the grant of Federal Government-owned rights, land, or property by the FGN as determined by the ICRC Act of 2005
  • In Nigeria, all concessions are awarded to project sponsors by the Presidency of Nigeria through its Infrastructure Concession Regulatory Commission (ICRC), which reports directly to it through the ICRC’s Board
  • The Concession is awarded in a Public-Private Partnership (PPP) Arrangement involving three phases: Project Development and Preparation; Procurement; and Implementation
  • At the end of Project Development and Preparation, the project sponsors are awarded an Outline Business Case Certificate of Compliance (OBC Certificate)
  • At the end of the Procurement, the project sponsors are awarded the Concession – the grant of rights, land, or property by the FGN
  • Implementation phase is the award of the project to the project sponsors

Marina Quayside Development (MQSD) Project Concession Process

  • The MQSD Project land site under consideration is 144-acre strip of land on Lagos’s waterfront, fully owned by the FGN
  • In 2017, Harris Aib Associates Ltd. (HAASSO) was awarded the OBC Certificate of Compliance on the Site for the MQSD Project – established the project as bankable
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MQSD Project – Sponsor

  • MQSD LLC (incorporated in Delaware, 2018) was created to implement the MQSD Project
  • Core business is the development and management of master-planned land
    • MQSD has invested in infrastructure
    • on-track to secure all the requisite regulatory approvals for construction
  • MQSD will “Build, Own, and Outsource” the management of parking, retail, hotel, commercial and residential real estate within the landside portion of the 144-acre land Site
  • Development rights for the 30 Piers will be leased to third-party developers who can begin construction concurrently with Development – Phase 2
  • Short-term rights to rooftops will be leased for events, and shared working spaces for innovation hubs
  • Concessions of public spaces will be leased for short-term use
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MQSD Project – Partners

  • Financial advisors and investment bankers
    • Castle Placement, LLC (New York, NY) engaged as the exclusive investment bank/placement agent
    • upon funding, Deloitte-West Africa/Dubai will be re-engaged as the lead financial advisors
  • Engineers and consultants
    • upon funding, to engage ARUP as the lead civil/structural engineers
    • upon funding, to engage Burns and McDonell as the lead mechanical, electrical and plumbing engineers
    • upon funding, to engage Applied Technology Management (ATM, West Palm Beach, Florida) as marine design and engineering consultants
    • Louis Berger (WSP) engaged – produced a feasibility proposal for power, water, waste, and transport infrastructure
    • Thomas Global Technologies (TGT, Houston, Texas) engaged – produced a feasibility proposal for digital infrastructure/ICT
    • upon funding, to engage Royal Haskoning DHV for Environmental and Social Impact Assessment (ESIA) in a two-season study
  • Original Equipment Manufacturer (OEM)
    • in 2014, early engagements with General Electric (GE) International Operations Limited (Nigeria) – Gas Turbine Power as the OEM for Gas Turbines, as well as providing power project development support
  • Top tier hotel brands
    • Starwood Hotels and Resorts Worldwide, Intercontinental Hotels Group, and Four Seasons Hotels and Resorts, among others, have submitted letters of support and expressions of interest in MQSD Project
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MQSD Project – Site

Adjacent to the Marina’s Central Business District

  • 144 acres of prime real estate – 2-kilometer strip of land on Lagos Island (Lagos Marina), 240 meters across
    • fully owned by the FGN (concession in process to MQSD)
  • Site is bordered on the north by Marina Street, on the south by Ring Road, on the west by Apongbon Street, and to the east by Broad Street
    • Broad Street and Marina Street are the among earliest roads built on Lagos Island
    • Popo Aguda, the historical quarters for Slave returnees from Brazil and Cuba, sits just North of Marina Street
    • Olowogbowo, another community for Freed Slaves, is on the edge of the Site bordering Apongbon Street
  • Rear of the Site is Marina Street, which leads to the Lagos financial and business district (aka Lagos Central Business District)
  • Adjacent to the waterfront overlooking Lagos Harbor – 60 meters into the inner harbor – opposite the Apapa Port Complex on Mainland Lagos
  • Currently, parking lots, filling stations, public toilets, haphazard public transport drop-off points make up the underdeveloped Site
  • Marina Quayside represents the city’s last great frontier for downtown growth and the largest underdeveloped parcel of urban land on Lagos Island, extending around the inner harbor
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MQSD Project – Pre-Development

Pre-Development is the step before the Development of detailed architectural and engineering design

  • Pre-Development Phase 1 – PPP Project Development and Preparation (complete)
    • preliminary business case submission
      • capacity to finance, deliver, construct, and operate project
      • technical feasibility studies
      • estimate project costs and develop financial model
      • justification of MQSD Project
      • ESIA
    • ICRC Review
      • approval of PPP project development plan
      • already achieved OBC Compliance Certificate
    • discussion and incipient payment of regulatory fees
  • Pre-Development Phase 2 – PPP Procurement Phase (in process)
    • procurement
      • negotiation
    • final business case submission
      • review and development of legal, financial, ESIA, and sustainability
      • review and development of design drawings – marine, geotechnical, civil, structural, architectural, MEP, digital infrastructure, power, data, water, and waste
    • reviewing bodies
      • ICRC, Ministry of Lands, Housing & Urban Development (MDA), Ministry of Finance and Economic Development
    • issuance of FGN Final Concession of site land and rights-of-way – slated by 1Q 2022E
      • Nigeria Federal Executive Council (FEC) approval
      • signing of Concession Agreement – commercial close
  • Pre-Development Phase 3 – Masterplan Document Finalization for Project Cost-Estimation – slated by 2Q 2022E
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Management

Arc. Harris Aib Igiehon

Executive Chairman & CEO

Architect (MNIA/ARCON) and Building Management Consultancy and Concept Marketing. Chairman of AIBTONIA Promotions Advertising Marketing Nig. Ltd. Consultant to several blue-chip companies including the Nigeria Stock Exchange and the Central Bank of Nigeria. Former CEO of a construction company. BS and BArch. from the New York Institute of Technology.

Deborah Wright

Executive Vice President – Business Development, Commercial and Strategic Communications

Over 27 years of international experience in Marketing and Management, as well as Planning, Strategic Communications and Administration. Managing Director of AIBTONIA Promotions Advertising Marketing Nig. Ltd. Served as Executive Director of construction companies. BA from Yale University, MPH and PhD (Cand.) from University of California at Berkeley.

Ambassador Robert C. Perry

Chairman, Advisory Board

Over 30 years of international affairs focused on public policy and business development in emerging markets. Led trade missions to West Africa. Managed political relationships at U.S. Embassies in Latin America and Africa, managed counter-narcotics assistance program in Latin America and facilitated trade and investment. Director – The Stevenson Group. Former U.S. Deputy Chief of Mission in Mauritius and Bolivia, Ambassador to the Central African Republic, and Deputy Assistant Secretary of State in the Bureau of African Affairs. Former Vice President at Corporate Council on Africa. Former Principal at RCP & Associates. Member of the Council on Foreign Relations and the Association of Black American Ambassadors. Serves on Board of the South Africa Washington International Program (SAWIP). MA in International Affairs from American University. BA in Political Science from Wittenberg University and attended the National Defense University.

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Learn More About This Transaction

CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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