Long delay due to logistics and skill problem says GM
May Real Estate announced that it will be inaugurating its apartment complex located in the Kazanchis area close to the United Nations Economic Commission for Africa (UNECA) compound.
The company that was established in 2003 with a paid-up capital of 1.5 million Birr handed over keys to around 30 of its customers on Saturday April 26th. During the hand over event, the clients signed contract agreement as well as received the title deed.
“We have built three block condominiums that have 115 apartments with adequate parking space on an area of 5,000 square meters. I believe we are the pioneers of real estate development in the country,” said Yoseph Mebrahtu, General Manager of May Real Estate.
It took the company eight years to complete the construction of the condominiums. Yoseph attributes the delay to problems such as a cement shortage, power interruption and security issues during high level meetings that used to be held at the UNECA.
Yoseph says the real estate sector still has a long way to go in the country. “When I first came here, there was no real estate law. Even now, the sector has a lot of short comings. Real estate development needs to be carried out in cooperation with financial institutions, not by taking money from customers,” he stated.
Yoseph adds that the existing labor force has not been specialized, which makes construction challenging. “When you hire labor to do the tiles, for example, you cannot find somebody who is specialized in that area. The skill of workers is backward,” he stated.
According to Yoseph, the cost of construction is very high in Ethiopia because the educated labor force does not get as involved as it should. “Engineering students are not introduced to the field work early in universities, and many of them choose not to get involved in the sector at all once they leave school. That has been my observation. The work is done by those that have not specialized in what they do which leads to things being done wrong,” he said. He also feels that urban planning should be given more focus and should also involve real estate developers.
“Around the city we have the so called malls, but they are not real malls, they don’t even have enough parking spaces. They are similar to other high rise buildings. I believe urban planning needs to be given more focus,” he said.
The general manager stated that May Real Estate has actually lost a lot of money. “When I started this construction, the exchange rate of the dollar was around 8 Birr. I have lost over 60 million Birr because of the inflation but what can I do, I don’t want the hard work to go to waste. I requested the clients to pay more and there is still an on going court issue on that, he said.
Back in 2010, the company sent emails to its clients announcing that it was charging more for the units.
Buyers then demanded that the firm hand the apartments over to them within a month of the email announcement and filed a suit against the company. But the delivery did not take place and the company went on to notify its buyers that it had canceled its contract with them, which lead to a civil suit against it. The Federal High Court, in January 2013 ruled against May Real Estate and order the company to pay 24 million birr to 28 of its clients. The Company than filed an appeal.