Access Real Estate S.C. is liquidating part of its assets purchased in different parts of the city for real estate purposes to get a relief from the financial
constraint the company is facing currently.
Ermias Amelga, Chief Executive Officer of the company in an exclusive interview with Capital said that his company is liquidating parts of the assets it bought in different parts of the city. “In the last two years we bought over 30 assets in different areas of the city in view of developing them. However after we started our first projects that are about 11, we faced difficulties due to many reasons and we decided to sell the assets that we are not going to develop in the next coming years,” Ermias said in a phone interview from Dubai.
“I thought it was simple to construct all these projects in a short time, but there is a capacity constraint in the country when we come to finding capable professionals, moreover the projects are huge,” Ermias explained. “The 11 projects we are handling now are very challenging so we scrapped the new projects and decided to sell them as we need the money for the ongoing projects,” he further said.
Established in 2008 Access Real Estate became one of the major players in the real estate sector in the country. Access managed to sell its houses in a very short time after aggressively entering the market that has needs of over 40,000 homes annually to address the acute shortage of “affordable” quality housing in Addis Ababa.
Ermias also said that his company acquired these assets in highly desirable locations which made them sellable easily.
5% of Access clients applied for refund
Meanwhile, Access has been subjected to allegations of not paying back the money customers had advanced for their homes having annulled their contract with the company. Many were complaining that they could not get their money back even after the company agreed to pay them back .
Access Real Estate had promised its customers to pay back their money with 15 percent interest if it does not deliver the houses according to their agreement.
“We set the bar high and that helped us in getting business, as we promised to pay back the money with interest. Yes we did not deliver as we promised and we saw contractual cancellation starting from November 2012. About 5 percent of our customers applied for a refund but different incidents happened that makes the small case bigger,” Ermias said.
“One person was handling the finance until recently, and that was our mistake, but now we corrected it and a team of professionals are handling the refund. Moreover we have now arranged a schedule for the payment and notified our customers,” Ermias added.
Ermias was detained last week after being held in custody at Kirkos District Police for one day on allegations of writing bad cheques. He was released on Friday February 22.
The failed agreement with Soliton Holdings
The agreement signed in April 2012, between Access Real Estate and a Dubai-based company Soliton Holdings, to transfer the management of Access Real Estate’s projects to the latter in a joint venture agreement has failed.
The agreement was hoped will help Access deliver over a thousand homes within a year. Soliton has agreed to inject two billion birr into the company’s operations.
However, Soliton cancelled the agreement after a series of questions emerged about the lease arrangements and other issues, according to Ermias.
“Their lawyers raised some questions with regards to the working procedure and were frustrated,” said Ermias. However he claimed that he is still working with the holding company in another project. “The partnership in the real estate failed for different reasons but we are still working on other projects together; we have another big project coming up that needs big funding.”
Access has become one of the largest real estate firms with several hundred houses sold to home buyers both locally and abroad, although there has not been a single unit delivered to buyers, over the past five years.
Delivery has remained an issue for the company that claims to have sold close to 1,200 units at 40 project sites; others put this figure much higher.
Access is the only company in Ethiopia that offered to build and deliver houses within 12 months.