Share sales below expectations
Cut throat shares market competition and lackluster performance of sales associates are being blamed for a disappointing attempt by Habesha Construction to sell shares. Though they retailed nearly 43.73 million birr worth of shares that cost 1,000 birr each, they had hoped to rake in 400 million birr.
Habesha Construction also pointed to bureaucracy which prevented them from finding a land to lease through tender, lack of infrastructure on land, the high projection of the company’s plan to sell shares, competition with Renaissance Dam bonds and doubts among people about the viability of buying shares as contributing to the less than hoped for result.
Yet, compared to many upstart share companies they say they are doing well.
“We plan to stop selling shares and instead partner on a Joint Venture basis with private real estate companies to execute our housing aims,” Bekele told Capital.
HCMDSC plans to partner on a joint Venture (JV) basis with four real estate companies.
Same Real Estate company will help HCMDSC to construct 304 condominium apartments and 25 standard villa houses in Bole district, Summit Factory area lying on 43,000sqm. Sunset Real Estate Company will be involved in building 10 Ground+4 modern houses with state of the art facilities on 8,500sqm in Meri Loke area of Yeka district.
A third JV is with Abew Real Estate Company lying on 9,500sqm and consisting of two Ground+4 housing units and eight Ground+1 villas.
These three projects are already underway and a fourth with Tigat Business Center Company is in the design stage and consists of 2175sqm in Yeka district. The housing project will consist of a two basement Ground+10 building to be used as a multipurpose business center.
HCMDSC has two other real estate projects. One is located in Ayat site, Yeka district on 1,060sqm, where 50 houses each Ground+8 sized for personal and business use have already begun construction.
The other one is located in Ritchie area, Kirkos district lying on 552sqm and is in the design stage.
Habesha Construction Materials & Development Share Company (HCMDSC) made the announcement about the share sale results in its performance report where it also announced it plans to disburse a yearly profit amount of nine million birr for the current Ethiopian fiscal year 2011/12 among its shareholders. This implies that they could expect to receive a 35 percent profit per paid share.
Ayele Alemu a 50,000 birr share subscriber at the company said he is generally satisfied with the performance of the company despite some hitch and plans to purchase even more shares.
Habesha Construction was founded in August 2009 with 200 shareholders and 200,000 birr subscribed capital. Currently it has over 2020 shareholders.