13 minute read
Gift Real Estate: Giving Gift
By Aklile Tsige
The Black’s Law dictionary defines real estate as something that includes the land and anything fixed, immovable, or permanently attached to it such as buildings, walls, fixtures, improvements, roads, trees, shrubs, fences, roads, sewers, structures, and utility systems. Real estate, therefore, can be defined as a property comprised of land and the buildings on it as well as the natural resources of the land, including uncultivated flora and fauna, farmed crops and livestock, water and minerals.
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Even though most refer “real estate market” to only mean residential living, it can however be grouped into three broad categories as: residential, commercial and industrial. Residential real estate can include undeveloped land, houses, condominiums, and townhomes. Commercial real estate on the other hand can include office buildings, warehouses and retail store buildings. Whereas, factories, mines and farms can be categorized as industrial real estate.
Many argue that the advantages to owning real estate are substantial. Real estate is a tangible asset that can provide income you don’t have to work for. Real estate values frequently appreciate. You can buy with borrowed funds, so you can control an entire property while only paying a fraction of its cost.
Today, the Ethiopian Real Estate market is hotter than ever, especially after the new reforms being introduced in every sector of Ethiopian society. These reforms have reignited the real estate market in Ethiopia due to the ever growing demand for homes from both the local population and the Diasporas.
Gebreyesus Igata is the Founder and Managing Director of Gift Business Group Plc., which is running sister companies, includingone of the leading real estate companies in Ethiopia-Gift Real Estate Plc. He has got over 40 years of experience in trading; he’s an industrialist who earned MBA in International Leadership. Gebreyesus has taken different trainings on business development, and travelled to more than 45 countries to attend conferences, exhibitions and B to B meetings.
ABN Editor-in-Chief Aklile Tsige sat with Gebreyesus Igata, to discuss the thirty plus years of company’s successful journey, challenges and the way forward.
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Gebreyesus Igata
Founder and Managing Director
Throw back
It was in 1991 during the Dergue Regime’s Free Market Economy landscapethat Gebreyesus Igata who has developed his business skills early in his childhood, established Gift Trading Private Limited Company that still remains one of the reputed trading companies in Ethiopia,with a total start-up capital of 350,000 ETB.
Gift Trading Plc. which takes its name by acronyming Gebreyesus Igata Family Trading,is a dynamic and fast growing business enterprise mainly engaged in- import-export& wholesale distribution, commission agent as well as construction and manufacturing. The company’s main product line includes: All grades of bitumen (asphalt), wood glues, nails, wall Paints, deformed bar C.R. Sheet, constructions chemicals, automotive tires, car batteries, home and personal consumables, office furniture and supplies, and other general commodities.
The company decided to produce and substitute imported goods at home, and opened a nail factory some twenty two years ago after securing 10,000 sq. m of land in Addis Ababa. Gift Trading Plc. gradually engaged in construction and purchasing of various buildings to undertake its flourishing businesses, stretching almost in all parts of the country.
Officially established in 2004,the umbrella of this family business-Gift Business Group had been working on trade business for many years, and is made up of Gift Trading, Gift Construction, GNM Industries, Gift Building Materials, Gift Nails Manufacturing Plc., Gift Property Management Plc., and Gift Real Estate Plc. Gift Real Estate
A major business force already successful in the trade and manufacturing sector, Gift Trading Plc., has expanded its operation into the real estate arena by establishing a subsidiary- Gift Real Estate Plc. This came into being in response to Addis Ababa City Administration’s call for curbing residential houses problem in the metropolis.
As an affiliate company, Gift Real Estate enjoys the unparalleled reputation of its parent company. It offers comprehensive real estate development services from selection of site to construction and property management.
Gift Real Estate has now concentrated its efforts and resources towards the development of a prestigious real estate complexes to address the growing demand for both residential as well as commercial properties. It is fully committed to fulfilling its customer’s dreams by providing them with luxurious yet affordable houses.
“We are now working round-theclock to complete the massive construction at Hayat site, embracing modern and exquisite buildings with all necessary facilities such as supermarkets, offices, children’s playground and parking lot.”
Gift Real Estate has begun its operation after securing 16 hectares of land at CMC and Hayat areas with three sites. The first site the company started its construction is located opposite to Addis Africa
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International Convention and Exhibition Center construction site, building different villas at a cost of 150 million birr.
Targeting middle-income citizens, Gift Real Estate has built variety of houses behind Tsehay Real Estate at a cost of 500 million birr, and delivered the houses to buyers with colorful ceremony attended by Government high level officials.
“We are now working round-the-clock to complete the massive construction at Hayat site, embracing modern and exquisite buildings with all necessary facilities such as supermarkets, offices, children’splayground and parking lot.” Said Gebreyesus Igata, Gift Business Group Founder and Managing Director. He added that this construction is estimated to cost 3 to 4 billion birr upon completion, and will be one of the most fascinating and breath-taking villages in the city. Gift Real Estate plc. doesn’t look for most construction inputs outside its business group; its sister companies like the grade-1 contractor- Gift Construction have been engaged in subcontract tasks and supplying building materials such as aluminum frames, wood works, cement and cement products, pipes and other materials required for the construction of houses.
Group’s Managing Director, Gebreyesus noted that as human resource and finance are the most important engine of a business company, Gift Real Estate pays due attention to human resource and professional development through attracting talents, designing succession plan, and providing employees with different on-job trainings. According to JD Esajian, the importance of customer service in real estate should never be second guessed. Real estate investing is unquestionably a customer service industry, and the way in which investors communicate and interact with clients will ultimately determine their long-term success. Because the majority of investors tend to look strictly at their bottom line, the one aspect commonly overlook is customer service.
Real estate investor should seriously consider developing a customer service mission statementfor their company. While a conventional mission statement aims to articulate a company’s core purpose to the public and provide direction for the future, a customer service vision is meant to be shared within the organization. It serves as the foundation for any strong business, representing what the company stands for, why it exists, and how all employees can play a part in that vision. The Managing Director said, “Gift Real Estate is a customerfocused company that values the needs, interest and demands of its customers; we do provide them with multiple options in types, size and location of villas while giving them chances to supervise and follow-up the construction process of the houses they are anxious to see their completion.” Direct access to a public road, or access to an internal road that provides communication with the public road, are a factor affecting the value of real estate. In addition, this factor is taken into account in the process of changing the function of the area, especially in determining zoning and land use. The decision of purchasing real estate often depends on transportation accessibility, because it has an impact on developing the selected plot.
“I am usually wondering what I do for my country; we hold firm belief that private businesses should participate in the nation’s overall socio-economic endeavors. We are dealing with all these social responsibilities with pleasure.”
In this regard, Gift Real Estate plc. has initially embarked on selecting sites that are accessible to road transport. “All our real estate construction sites are easily accessible to transport service; we know that access to transport determines the value of our products.” noted Gebreyesus.
As stated by United Nations Industrial Development Organization/UNIDO/,Corporate Social Responsibility/CSR/ is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders.
In this sense Gift Real Estate has from the onset dealt with various corporate social responsibilities in the country.” We are very proud to support the construction of the Grand Ethiopian Renaissance Dam /GERD/; we‘ve donated a villa estimated to be worth 4 million birr and purchased a 2-million birr bond.” Gebreyesus indicated. In response to COVID 19 pandemic prevention, Gift Real Estate plc. has been engaged in awareness raising campaign and provision of necessary sanitary materials to people in need and vulnerable to the virus.
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With regards to establishment of new tourist destinations which is part of national development effort, the company has donated five million birr each for Gebeta Lehager and Gebeta Lesheger projects; it has also provided chairs and tables to poorly operating schools in order to help change
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inconvenient school climatein Addis Ababa.
Gift Business Group, as life time member of the Ethiopian Red Cross Society, has donated an apartment intended to be sold by auction in support of the construction of its headquarters at the heart of the capital, Addis Ababa; moreover, the company has donated millions of birr, taking part in almost all telethon calls for supporting development projects in various regional states of the country.
The company has actively been participating in Green Legacy initiative across the nation. The Managing Director said, “We have now plan to develop a green area nearby our site at a cost of four million birr in addition to financial assistance we provided to Addis Ababa Greenery and Beautification project.”
“I am usually wondering what I do for my country; we hold firm belief that private businesses should participate in the nation’s overall socioeconomic endeavors. We are dealing with all these social responsibilities with pleasure.” Said Gebreyesus. He also disclosed that Gift Business Group wishes to establish a charity organization aiming to support orphans in a sustainable manner, and continue to keep giving gifts to the community. Challenges and Way Forward A recent report on real estate by Access Capital indicates that there are both challenges and opportunities in the real estate sector in Ethiopia. The key obstacles facing the sector include land policies, the scarcity and cost of construction materials, infrastructure, and financing. In terms of opportunities, the report highlights the potential of four segments of the real estate market: city-centre commercial developments; residential developments, including apartments, focused on middle income groups; new developments based on innovative and cheaper construction materials; and commercial parking developments. When it comes to Gift Real Estate
Plc., the major challenges it faced at the beginning was lack of infrastructures such as water, electricity and road access. Boundary dispute was also one of the bottlenecks to legally secure land for the construction of houses; community members nearby the real estate development site were complaining and arguing over ownership of land despite government clearance of such issues.
“I know what I didn’t accomplish is more than what I did; I have to go a long way. I need to create significant job opportunities to my people. I wish I could hire 10,000 or 20,000 citizens. That’s what I am reaming of.”
The Managing Director stated that marketing and promotion of the business was found to be a challenge. “We had to go to overseas especially in Europe and North America, to promote and convince the Diaspora to buy our built houses; we were, in fact, successful in our marketing and promotion campaign there. 45% of our customers are Diasporas.” He added.
There are actually challenges in the availability of material – you cannot get the quality or quantity needed. There is also a need for skilled and unskilled laborers. You can see there is a lot of construction going on and everybody needs skilled and unskilled laborers, and the company needs material. There are no particular factories here for producing construction material.
Private investment in the real estate sector is expected to grow in the coming years, according to various sources. There are a number of factors driving this. These include (i) overall economic growth (as real GDP has grown by an average of 10.8 per cent per annum in the last 10 years); (ii) demographics (the urban population continues to rise and the population of Addis Ababa is expected to more than double by 2040 to reach around 8 million); (iii) a long history of unmet housing demand; (iv) the expansion of city roads and infrastructure.
By 2030, Gift Real Estate envisions being a leading real estate company in Africa in delivering top quality products and world class high tech services in real estate and hospitality. Their ownership of manufacturing industries targeting the construction of homes and buildings has helped them pass down the reduced cost of sourcing materials on to their clients,
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thereby providing costs that are considered fair in the industry.
Successfully completing the construction and delivery of houses at both sites, CMC area, which is currently booming and a hotspot for new home owners, the company is now striving hard to finalize the Hayat site construction project in its short-term plan.The availability of beautiful scenery is a plus as the homes are located on elevated surfaces providing the home owners with a vista view. Green areas, playgrounds, shopping venues and common parking provide more perks for their clients.
Gift Real Estate Plc., Founder and Managing Director recommended that Ethiopians need to develop good habit of working hard; it’s only through hard work that people can get out of abject poverty and descent life, adding that the Federal Government should also pave ways to promote job creation for the growing number of youth across the nation.
He explained that the Government and other stakeholders should avoid overlybureaucratic schemes and poor governance in order to establish an enabling environment for the public to engage various types of entrepreneurship and business channels, adding that policies and directives should be very clear and convenient to attract more private investors. With regards to the nation’s transport sector development, the Managing Director indicated that Ethiopia is lagging behind the time in terms of modernizing and availing transport services both in quality and quantity. Thus, he recommended that great emphasis should be placed on the expansion of quality road construction, revision of government’s laws, regulations and policies on vehicle taxation, and promotion of private investors to engage in the sector.
“I know what I didn’t accomplish is more than what I did; I have to go a long way. I need to create significant job opportunities to my people. I wish I could hire 10,000 or 20,000 citizens. That’s what I am reaming of.” Gebreyesus noted.
The company now seems to be committed to developing and delivering quality and affordable residential and commercial real estate facilities to middle and high income groups, provide modern property management and related services, and play critical role in the overall real estate development venture, and ultimately contributes its role in overall economic development of the country.
