Plot in Merkato fetches 10,000 birr per sq. mt.

By Groum Abate

In an extraordinary turnout of bidders interested to lease land for 99 years from the city administration, following the Addis Ababa Caretakers Administration announcement of its first auction since it took office, a plot around Merkato, commonly known as Berbere Tera , was auctioned at 10,000 birr per square meter.

At the bid opening held Thursday morning, at the Municipality, an unspecified person submitted 10,000 birr per square meter for a plot of 1000 sqm located in the heart of Merkato offering to pay 10 million birr. M any agree this is the highest ever submitted for a plot in the city.

The second bidder offered 7,000 birr and a third bidder offered 5,000 birr per sq. meter for the area. The floor price given was 207 birr per sq. mt.

This auction also witnessed other surprising proposals for plots around the city, and wonder where this rather astonishing spiraling of land price is going.

A residence plot located around Ayat area has fetched 3,125 birr per square meter, which is almost double than the last auction that took place a year ago.

A plot in Yeka sub-city commonly known as Dehninet has also fetched a staggering price of 2,051 birr per square meter. Plots in this area have been auctioned with a maximum price of 400 birr per square meter in the last auction held a year ago.

A plot around Mekanisa Lebu area has also fetched 2,000 birr per square meter and the least price that was offered was 1,575 birr per square meter. The floor price for this area was 207 birr. The administration had speculated a collection of over 80 million birr in this round of auction but observers present at the bid opening said that it would definitely make much more than that.

The city administration put up for auction just 167 plots located in Gullele, Yeka, and Nifas-silk Lafto, Kolfe and Addis Ketema sub-cities. The plots' auction was for residence, business, and mixed-use purpose. Thousands of citizens des perately flocked sub-cities offices to collect the bid documents available for one hundred birr and dashed to visit the areas before November 9, 2006, the closing date.

The administration requires a specific amount of money to be deposited in a blocked account and verified by a bank and be submitted with the bidding document as a construction guarantee. This scheme is introduced so as to exclude those who participate in the tender without the necessary financial backup.

37,000 birr was required for biding for a 250 square meters of plot and 67,000 birr for a 500 square meters of plot. Many participants who lost in the bid question the virtue of the reckless bidders, their motivation, and to what end they would bid so high. “Though 20 years seems far, payment for the plot does start in two years time and with going bank interest. Something, they seem to have ignored,” said one bidder.