Urban Land Lease Price in the Capital




This year, urban land leasing in the capital has repeated the ever escalating price trend in the 17- 21st rounds.

In the last five rounds of auction this year, 26ha of land portioned into over 600 plots have been made available for buyers in the city.

The largest area of land, nine hectares, was made available during the 20th round, while the least was made available during the 18th round, just 1.5ha.

The five rounds of bids over the past 12 months have tabled approximately 45, 150 and 300 plots, for business, residential and mixed use, respectively.

The City Administration succeeded in securing offers for these plots and was able to earn more than four billion birr from the winning bidders. The highest offer was made for a business plot in Bole at 31,260Br a sqm for a 393sqm plot. A plot of 175sqm in Lebu-Jemo, under the category of expansion. was priced between 200-355. The plot, dedicated for residential purposes, also attracted the highest price in the city of 36,105Br a square metre. While the highest prices offers, for mixed and residential plots made in Nefas silk attracted 62,000 and 36,105Br a sqm, respectively.

The municipality’s initial benchmark prices were set based on the cost to provide infrastructure demolition and compensation to previous owners. It is, however, way below even the lowest prices offered for any plot. The maximum earmarked prices set a range of 1,686Br a sqm for plots designated under the central market district, 1,035Br in transitional zones and 355Br in the suburbs.

Despite the skyrocketing land lease price, the amount paid as compensation has remained at 20Br a sqm – an unfair distribution of value between the joint owners, the prior owners and the government.

A similar trend is seen in the race to secure ownership of the underground shops at the low cost housing scheme’s condominiums,

Keeping the bid tough among them, commercial banks dominated the bid. Nib bank offered over a 100,000Br/sqm, almost double of the average price quoted for the same spot.

Squatters in the Capital

Squatting was identified by the city administration as a priority issue, with a series of actions being taken. This left many without shelter and some without their lives.

It was in June, during the rainy season, that the city administration decided to clear up illegal settlers, flattening their shelters to the ground. Last year, over 2,500 squatters were identified in only three districts, and have been served with notice.

Rural – Commercial Farm Lands Commercial farm lands in the rural zones are at the centre of common administration by the regional and federal regulatory bodies, which investors find inconvenient.

The past year has been characterised by harsh measures on many farms that have failed to perform as per their prior agreement.

Over 125 companies, working on approximately 466 thousand ha of land in three regions have been axed from their lands, while other received warnings. Eighty percent of them were in Gambella. One investor, who had leased 1,000ha of land, said that he had already cleared 50ha at a cost of 45,000Br a hectare to grow sesame.

“I am an outsider; I have no idea that the land is under federal jurisdiction,” he told Fortune back in February 2016 Some are still appealing to the PM’s office.

 

Series of Events

December

Commercial Farm Licenses Terminated

The Agency terminated the licences of three foreign companies and one local company. The Agency also issued first warnings to one local and six foreign companies, and last warnings to five local and two foreign companies. From these eighteen companies, eight were granted land in 2010; the rest in 2011 and 2012. The Benishangul Gumuz, Gambella and Southern Nations, Nationalities & Peoples (SNNP) regions were among the regions targeted for agricultural investment. Of the total farm land leased by 18 companiesm 51,358ha were in SNNPR, with the lion’s share of 197,000ha in Gambella and 62,000ha in Benishangul Gumuz.

Commercial Farmers Evicted

Gambella evicts close to 100 local commercial farmers from approximately 70,000ha of land, citing a breach of contract and rent seeking tendencies.

March

DBE Pauses Lending to Farmers ­

The issuance of agricultural loans has been curtailed until issues in the sector are resolved.

A correlation between loan disbursements and higher NPL’s has been observed . Banks with higher disbursements to agricultural projects also had a higher NPL ranking. Zemen Bank, with 12.04pc in loan disbursements, reported a 5.53pc provision for bad debt, while Abay Bank with 4.12pc of loans also recorded 3.44pc of provision. Contrary, the reverse trend is true for Awash Bank, with a low proportion of loans for agriculture and an NPL provision of 0.25pc.

March

Banks Break Condo Shop Record

Winning 30 shops, put up for auction by the Addis Abeba Housing Agency, Nib International Bank (NIB), Berhan International Bank (BIB), the National Insurance Company of Ethiopia (NICE) and the Addis International Bank (AiB) have won 14, 13, two and one condominium shops, respectively, in six different sites in Addis. The highest offer was 101,111.11Br a sqm made by Nib Bank for a shop on the Lideta Meliso Malmat site – over double the average price of 43,967Br.

May

Squatter Exodus

‘Exodus kicked off on May 18, 2016, for squatters in the Weregenu area, on the outskirts of Bole District. Some had left their dear ones’ remains in a local churchyard nearby.

During the following days, women, men and children were busy collecting as much as could be salvaged from their demolished houses, for inputs for their next home – most of them cannot answer where this will be. Two lives passed in the standoff between the squatters and demolition squads, while resisting the action.

June

MIDROC’s Piassa License Renewed

The infamous decade-old defunct holding of MIDROC Ethiopia at the heart of the city, Piassa, had its title deed revised anew. The orginal 3.5ha of land was modified marginally, with a 0.3ha deduction. The revision was justified with few modifications the 10th draft master plan will recommend, according to the City Land Management Office. Abinet G Gebremeskel, a close confidant of Mohammed Ali Al Amoudi (Sheik), has signed the contract representing Huda Real Estate, a subsidiary of MIDROC.

Demolition of Squatter Housing

In the same week, the demolition of houses continues on those who settled in Arada District, Wereda 8, in front of Parliament. This squat has been there for more than forty years. The demolition ended up in a police-squatter standoff on Saturday, June 17. Besides the more than 80 people displaced, 15 individuals ended up in police custody for three days. The expansion projects consists of two new buildings and a parking lot at the cost of two billion birr.

July

Demolition Continues, Followed by Exodus

June 29 saw another demolition mission in Wereda 01 of Nifas Silk Lafto District, an area known as Urael. This one saw the deadliest incident from both sides. The aggressive confrontation between the demolition task force and illegal residents, estimated to include 5,000 households, ended with the death of four individuals – the wereda demolition task force leader, two deputy inspectors and one of the squatters. Unaccounted number of others wounded on both sides.

June

Tenth Master Plan Out for Public Discussion

It requires a budget of over 200 billion birr over the following decade. It promises to elevate the city’s standard to half a million houses, to be built in Koye Fechie, Bole Arabsa and Yeka. Envisioning the greening and keeping clean of the city, it incorporates over ten parks. Six park and ride parking places are to be established in 13 districts – three more to the existing 10.

July

More Farms Face Measures

The total area of farmland implicated in the latest warnings equates to approximately three-quarters of the size of Addis Abeba.

Seven commercial farm developers, who occupied a total of 37,500ha of land in three regions, have received warning letters for leaving the land unutilised for so long. The Agricultural Land Investment Administration Agency wrote a final warning letter to one of the developers and first warnings to the remaining five. This comes after a four and six-year wait, respectively, for the developers to show significant produce from their estates. The investors who leased the land are in the SNNP, Gambella and Benishangul-Gumuz regions. After this, they appealed for an administrative remedy from the PM’s office.



Published on Sep 13,2016 [ Vol 17 ,No 854]


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