An Appraisal of ‘Developer-Finance’ Option for the Redevelopment of Family Properties in Lagos, Nigeria

Abstract

Family properties bequeathed by deceased parents are to be found in considerable numbers within the core and central business district (CBD) of most Nigerian older cities. A number of these properties are old and derelict having suffered considerable physical deterioration and functional obsolescence. Such properties are therefore not making the highest and best use of their respective sites while they possess considerable latent values waiting to be released by injecting capital into their redevelopment. However, given their ownership structure and title deficiency among others, this category of properties hardly qualifies for funding through the conventional methods. More often than not, ‘developer-finance’ happens to provide the only pliable method of financing their redevelopment. Regretfully, this mode of financing often runs into trouble with the project either poorly executed or abandoned midway. This paper examines the manner in which ‘developerfinance’ is currently practiced in Lagos Metropolis with a view to identifying grey areas and making recommendations for needful improvement. The study revealed, among others, that the use of ‘developer finance’ in the study area is limited in scope - limited to certain geographical areas, certain categories of properties, and also limited in terms of the scale of development. The study also revealed a number of fundamental but avoidable pitfalls which tend to endanger the practice and aggravate the associated risks. Remedies are suggested to forestall abuses and eliminate observed lapses.

Key words: Developer-finance, Inherited property, Redevelopment, Nigeria.