Access Real Estate Share Company (ARE) signed a two billion birr deal with a Dubai based firm Soliton Holding Limited, which will see its first investment in an African country.
The agreement framework will see Soliton providing project management and other technical resources to support ARE’s existing line up of developments with midterm supplementary construction capacity to be brought online.
Ermias Amelga, CEO of Access Capital the parent company of Access Real Estate, said the deal was an endorsement of what ARE is doing and what potential it has in store.
“It’s also a verification of what we’ve told our shareholders and what we’ve planned, helping ARE to become in a space of just three years, the most dominant real estate company in Ethiopia,” said a brimming Ermias.
Ermias further said that the deal which he saw as an affirmation of his company’s sound financial and delivery capacity of major projects to the clients’ wide variety of needs.
Access Real Estate currently provides housing ranging from a 399,000 birr apartment to a 10 million birr villa, with what it says is top quality.
However Ermias acknowledged that his company has failed to deliver on the first three of its 40 site projects which he blamed on a variety of reasons.
He noted problems related to the chaos created by the confiscation of some real estate companies who were alleged to have failed to fulfill their requirements six months after ARE entered into operation as well as to significant capacity problems with contractors and Access Real Estate itself.
He however countered critics doubt by saying Access is on track to deliver 1,200 units over the next 12 months out of 5,000 units its developing in its phase one plan which ranges from 12-24 months. In the second phase it plans to decentralize its activity to include even more projects.
Jurgen E. Herre, Managing Partner at Soliton Holding, said the company is not only here to consolidate its investments but also sees Ethiopia as a nucleus of its focus in Africa with the aim of transiting itself in six months time from a sales marketing organization into a construction oriented one.
The company says it looks for three values: quality, sustainability and reliability as its mutual benchmarking strategy and has found such in Access.
He also said the investment is not just financial investment but also providing know how and experience to boost the existing construction of ARE.
Soliton also says that it plans to restructure after three months time, contingent on the progress of the projects, while in six months time it plans to unveil its continent wide plans for the sector.
Jurgen further said they chose Ethiopia as their first gateway investment in Africa because of the vision of its leaders, stability and stunning growth rates.
Nevertheless both Ermias and Jurgen refused to be drawn into the modalities of the agreement such as the share of each company and profit sharing as well as conflict resolution mechanism in case the deal falls through per the contract.
Soliton Holding is a Dubai based company with offices in Hong Kong, United Arab Emirates, Germany and Africa with a focus on five specific areas of real estate, financial services, energy, healthcare and trading.
Soliton Holding and its partner companies have executed jointly projects with a combined value exceeding USD 30 billion.