Flintstone Engineering, one of the leading construction firms in the country, is going to introduce a new real-estate scheme for the local market in an attempt to empower small scale manufacturers.
The new program that will be launched on May 17, 2014 for interested buyers is a manufacturing building in Gotera area on a 1,100 square meter plot.
Officials of the company stated the new building will house light industries such as footwear, apparel, and leather production and the companies will also sell their finished products there. The site will also feature a printing press.
The eight floor building will have 134 production shops. The first five floors will house production units. The sixth floor will be used for an office facility and the seventh and eighth for marketing and business support services, while the ground will be a storage area.
According to Biruk Shimelis, head of the company, the building will be furnished with full production facilities before being transferred to buyers.
This kind of real estate idea is new for the country. The company officials disclosed that they undertook a detailed study before deciding to launch the scheme. Flintstone is a successful real estate developer that is known for delivering houses to clients in a short turn around period. They also plan to build similar facilities in other parts of the country. “We forecast that the current residential and shopping real estate development will collapse in the near future because wealth will be concentrated on very few people, who are buying one house from developers, and primary buyers will not own adequate capital to buy their own house,” Biruk explained.
“But to combat the challenge people need to acquire more capital. For this reason we have designed a new program that will increase productivity with less cost,” he added. According to the head the current scheme will create a sustainable market for the real estate sector.
With this system buyers can own their production area by paying a large installment amount. According to the company plan, the building will be built within three years.
Based on both the primary and secondary data analysis of a study the company conducted, the target group should be able to afford the property.
The viability of the business was investigated based on a market survey conducted by Flintstone in March 2012. Both primary and secondary data agreed with the claims of others that lack of access to finance and well developed property are challenges that have made it difficult for a middle class to flourish in Ethiopia. The price of the production shops are considered affordable when 60 percent of the net income from the business was sufficient to pay back the investment in four years.
According to people who participated in the study; 42 percent who planned to produce footwear, 53 percent in apparel and 85 percent who wanted to engage in printing were willing and able to buy production shops.
Flintstone is established in 1991 as a small private construction firm. In 2014 Flintstone Engineering’s contract portfolio stands at just over 3.1 billion birr.