The
July 2015
Featuring Properties from Tanzania & Kenya
www.darproperty.net
East Africa’s Ultimate Property Guide
FREE COPY
Issue No 40 | ISSN 1821-7753
The Darproperty - July 2015 | 1
ABLA BEACH APARTMENTS ZANZIBAR
STUDIO | ONE BEDROOM | TWO BEDROOMS | THREE BEDROOMS Abla Beach Apartments P.O.Box 4249 Zanzibar Tel: +255 673 761 123 / 713 573327/ 775 000 666/ 673 502 329/ Landline: +255 2425 782/3/4 BAIT EL RAS MTONI ZANZIBAR www.ablabeachapartment.com | info@ablabeachapartment.com
City
New Chalinze
Taasisi ya Miradi na Maendeleo ya Miundombinu ya UTT iliyo chini ya Wizara ya Fedha inautangazia Umma Uuzaji wa Viwanja katika Mji wa Chalinze, Mkoa Pwani
Wananchi wote mnakaribishwa kununua Viwanja hivyo vyenye Ujazo wa chini, kati na juu na vingine vya matumizi mbalimbali. Viwango vya kuuzia viwanja ni kama ifuatavyo:Matumizi ya Ardhi
Bei ya Kuuza Tshs kwa kila Mita ya Mraba
1.
Makazi, Majengo ya Umma (Public Buildings), Taasisi, Zahanati, Huduma za Ibada (Religious Institution), Shule, Taasisi za Elimu, Viwanja vya Michezo (Play grounds).
3,500.00
2.
Makazi/Biashara, Nyumba za Makazi (Housing Estate), Biashara, Hotel
4,000.00
Maelezo ya Upimaji Viwanja (Mahali/Aina ya Viwanja Vilivyopo Kwa Kuuzwa) Na.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
Idadi ya Viwanja
Matumizi ya Ardhi Makazi
1042
Makazi/Biashara Biashara Hoteli Viwanja vya Michezo Shule Nyumba za Makazi (Housing Estate) Majengo ya Huduma (Public Buildings)
89 27 3 2 8 3 3 1
Zahanati/Kituo cha Afya Ibada
4 4 1 1
Soko Kituo cha Biashara (Commercial Centre) College/Chuo
Maelezo ya Fedha ya Dhamana/Malipo ya Mwanzo Fedha ya Dhamana kwa kila Kiwanja (Tshs.)
Aina ya Mwombaji
1. 2.
Mwombaji Binafsi
400,000.00
Taasisi kama Mashirika, Benki, Taasisi za Dini, Shule, Mifuko ya Hifadhi ya Jamii n.k.
500,000.00
Angalizo:- Kwa waombaji ambao wataomba viwanja zaidi ya kimoja (kwa kampuni) watatakiwa kulipia fedha ya Dhamana / malipo ya mwanzo kwa kila kiwanja
Maelezo ya Mwombaji 1. Uuzaji wa Viwanja katika eneo la Mji wa Chalinze unafanyika kupita Benki ya Posta Tanzania katika Matawi yafuatayo:-Tawi la Dar es salaam fomu zinapatikana kwenye matawi ya Mkwepu, Metropolitan, Azikiwe (YWCA). Kwa Mkoa wa Pwani fomu zinapatikana Chalinze Postal Cooperation na Bagamoyo Mini Branch.Pia fomu zinapatikana katika tovuti ya www.utt-pid.org, na malipo yanafanyika katika Benki ya Posta matawi yote nchini. 2. Bei ya kununua Fomu hii ni Tshs. 15,000/= na mwombaji akipata kiwanja atakilipia ndani ya miezi mitatu. 3. Tafadhali rejesha fomu iliyojazwa vizuri katika Benki ya Posta; utapewa fomu ya uthibitisho / kukiri itakayoambatana na mhuri wa Benki ya Posta 4. Kwa maelezo zaidi/ufafanuzi wa yote hapo juu, tafadhali piga simu +255 757 254 653. 5. Ukubwa wa viwanja:-
(a) Ujazo mkubwa (400 - 800m²),
(b) Ujazo wa kati (801 - 1600m²), na
Imetolewa na: Taasisi ya Miradi na Maendeleo ya Miundombinu ya UTT
(c) Ujazo mdogo (1601 - 4000m²)
Tanz ani a´ sl eadi ngl and& pr oper t yagent www. t z agent s . com DaresSal aam
Pr oper t yi mg
Pr oper t yi mg
Pr oper t yi mg
FOR RENT Masaki - 5 b/r $ 5,500 / month
FOR RENT Kigamboni – 4 b/r $ 600 / month
Pr oper t yi mg
FOR RENT CBD – offices $ 16 / per sqm
FOR SALE Kunduchi Beach – 3 b/r $ 220,000
Ar us ha
Pr oper t yi mg
Pr oper t yi mg
Pr oper t yi mg
Pr oper t yi mg
FOR RENT Zanzibarian – 3 b/r $ 700 / month
FOR RENT IIboru – 5 b/r $ 600 / month
FOR RENT Sakina – 3 b/r $ 650 / month
FOR SALE Usa River – African Dream $ 795,000
Tanga/Pangani
Pr oper t yi mg
Pr oper t yi mg
Pr oper t yi mg
FOR RENT South of Tanga – 2 b/r Price on request
FOR SALE Sadaani – 10 acres $ 95,000
Pr oper t yi mg
FOR SALE Pangani Stahabu – 5,6 acres $ 85,000
FOR RENT Lodge for rent - 7 Bandas Price on request
Cont act s DaresSal aam
Raphael Nondi
Manager Dar es Salaam Tel. +255 717 032 633 raphael.nondi@tzagents.com
Ar us ha
Anders Wehtje
Founder Tel. +255 785 984 467 anders.wehtje@tzagents.com
Tanga/Pangani
Annabel Burdes
Representative Tanga / Pangani Tel. +255 784 632 529 annabel.burdes@tzagents.com
Pr oper t yoft hemont h! Ar us ha–Beaut i f ull odge-$995, 000
PHOTO
PHOTO
PHOTO
PHOTO
Thi ss t unni ngl odgei sl ocat edmi dwaybet weenKi l i manj ar oI nt er nat i onalAi r por tand Ar us haandi sonl y0, 5km f r om t hegat et oAr us haNat i onalPar k. Thel odgeboas t s e xcel l entvi e wsofMtKi l i manj ar oandMtMer u. Thel odgewasbui l twi t he xqui s i t e at t ent i ont odet ai lands us t ai nabi l i t y–s omet hi ngt hatcl ear l ys hows . Themai nf eat ur es oft hi sl ov el ypl acear e;9bedr oomsdi s t r i but edbet ween6pr i vat ecot t agesandt he mai nl odgebui l di ng, mai nbui l di ngwi t hups cal edi ni ngr oom, barandl ounge, mani cur ed gr ounds( 8acr es )wi t hmat ur egar den, s wi mmi ngpoolandanabundantbi r dl i f e. St af f quar t er sandt hr eecargar agewi t hwor ks hop.
A MODERN AND SECURE HOME WITH A STUNNING VIEW
CALL US NOW!
+255 762 545 866 +255 684 425 142
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THE REEF APARTMENTS
NEWLY BUILT APARTMENTS AND VILLAS FOR SALE AND FOR RENT PROPERTY FEATURES:
Ocean views or Private beach, Swimming pool, Modern kitchen appliances, Fully equipped gym, Air conditioning, Standby generator, 24hrs Elevator, High-end Security & CCTV cameras, Electric fence, Ample parking yard, DSTv connection, 24 hour Management service !
OCEAN WAVE APARTMENTS
LOCATION: Msasani Dar es Salaam, Old Bagamoyo Road, Plot 389/1 & 2 (opposite JKT)
LOCATION: Msasani Dar es Salaam, Old Bagamoyo Road, Plot 77B/2 (near Msasani Beach Club)
Email: reefaptms@gmail.com
Email: oceanwaveaptms@gmail.com
Livingstone St.
Adamas Residence
Msimbazi st.
Amani St. Livingstone Hotel
Morogoro Rd.
Lumumba St.
Puma Petrol Station
Livingstone/Amani St. - Kariakoo Adamas Residence 4th Floor. Mobile:
RENTAL YIELD OF RESIDENTIAL PROPERTY IN DSM
A
s a real estate investor in Tanzania especially Dar es Salaam, it’s important to know rental yield because the yield of a property tells you how much of an annual return you are likely to get on your investment. Yield is a measure of percentage of income return you get from an asset, this measure applies to a number of assets, especially shares and real estate. For real estate, the yield calculation is the percentage of rental income for the purchase price, the yield is calculated by dividing the gross annual rental income by the purchase price or the current valuation. Rental yield can either be expressed as a percentage of purchase price or current valuation, yield calculated with the current gross rent and current valuation allows you to monitor several aspects of your investment property while yield calculated with the current gross rent and the original purchase price will provide an indication of how much rent have been increased or decreased since purchase. Falling yields either means an oversupply of rentals and hence falling rent or else a rising property market with valuations increasing. Increasing yields either means a strong rental market with rising rents, or else falling property market with dropping valuations. To get a yield of a typical area, one of the more useful measures is to start with an accurate indication of the current valuation of your property and other 12 | The Darproperty -July 2015
For real estate, the yield calculation is the percentage of rental income for the purchase price, the yield is calculated by dividing the gross annual rental income by the purchase price or the current valuation.
similar properties in the region, and also current rent prices being achieved in those properties. In rough terms, if the rental yield is 2 to 3 percent higher than the current interest rates, then the property is likely to be cash flow positive. Real estate investor can use rental yield data to determine whether he over or under charging in rent on his investment. Yusuph Mhando. yusuph@darproperty.net
AVERAGE RENTAL YIELD FOR A FOUR BEDROOM PROPERTY IN SELECTED AREA IN DSM LOCATION
RENT (USD)
PRICE (USD)
YIELD (%)
Upanga
4,640
1,007,692
6
Masaki
4,703
1,307,143
4
Msasani
2,519
722,000
4
Oysterbay
5,200
2,111,111
3
Ada Estate
3,806
900,952
5
Mikocheni
2,657
431,586
7
Kawe
3,031
1,017,765
4
Kijitonyama
1,345
230,769
6.9
Mbezi Beach
1,560
368,108
5
Construction Boom Leaves Nairobi In Office Space Glut – The Half-Truths Real Estate
Correct me if am wrong, but there is nowhere in the world (okay let’s stick to Africa, before you get all wise cracking on me) where you will get an annual average occupancy of 100%. Why? Office occupancy is dynamic, businesses expand, people move to bigger or smaller spaces, and some are even evicted. The Nairobi CBD has seen a lot of flight by corporates to other locations for all those reasons that have been listed by my friends at Mentor Management, but try getting office space
in town today and you will find only a handful. The Report made it seem like the Nairobi CBD is a ghost town. The truth of the matter is that there are businesses that thrive within the CBD. The human traffic that passes through the CBD is more than the combination of Westlands, Upper Hill, Kilimani, Gigiri, and Karen. This obviously translates to business; ask the banks, insurance companies, professional firms, even start up SMEs. Let me stop there, this article should be about Upper Hill. Unlike the half-truths contained in the Office Market Report for 2014 by Mentor Management, it is my personal opinion that Upper Hill is nowhere near having a glut now or the foreseeable future if you go by all the macro-economic factors. The report concentrated on the supply side and completely went off the grid on the demand side. I confess that maybe I did a cursory run-through the report, but understand me, why go through all that pain to sift through errors. By the way, I learnt a new word the other day; Errorist – someone who repeatedly makes mistakes, or is always wrong. Westlands was also bundled in the wagon of doom, while Kilimani Area was suspiciously given the saving grace, where all property investors should run and take cover. All in all the report completely ignored the office tenant; who he really is, where
“
Correct me if am wrong, but there is nowhere in the world (okay let’s stick to Africa, before you get all wise cracking on me)where you will get an annual average occupancy of 100%
“
The Business Daily 27th November 2014 reported that “…..In its second Office Market Report for 2014, Mentor Management Limited said that Upper Hill was entering the peaking phase of development which is characterized by supply exceeding demand by at least 20 per cent…”. I was shocked beyond words when I read this article. But before then, there was another article in 26th February 2014 “…Commercial buildings in the Nairobi CBD expected to go empty as firms escape heavy congestion, says new report….”. What is my opinion, you ask. I will summarize in two words. Careless Reporting! Not by The Business Daily, but by Mentor Management Ltd. Yes I said it…I hope they don’t sue me though (on a serious note). I know drawing conclusions is very subjective, but there are some things that are just plain to see.
he comes from, what makes him feel alive, and how he likes his space. Unfortunately, this is a story for another day. So that Mentor Management doesn’t sue me for slander or libel, any reference made in this article refers to the contents of the referenced reports released to the public in the stated dates, and does not in anyway refer to the company, or its ability to perform its business.
Morris Omollo - Property Consultant Registered & Practicing Valuer and Estate Agent in Kenya morris@darproperty.net
Do not take chances with your Real Estate Investment. Go for TBS approved products. We approve standards of all kinds of building materials. From Institutions and Individuals.
Tanzania Bureau of Standards -TBS Ubungo, Morogoro / Sam Nujoma Rd P.O. Box 9524 Dar es Salaam, Tanzania Tel: +255 22 245 0298 | +255 22 245 0206 Fax: +255 22 245 0959 info@tbs.go.tz | www.tbs.go.tz
samsa real estate ltd “Where customer needs are fulfilled”
Make yourself at Home, Samsa Real Estates offers a personally inspected selection of privately owned, furnished accomodations for rent which includes everything quality, heritage stlyed homes to luxury downtown apartments.
FEATURES: Offices Fully furnished Swimming pool Modern kitchen appliances Fully equipped gym Air conditioning Standby generator Elevator 24hrs Ample parking DSTv connection High-end security & CCTV cameras 24 hour Management service
CONTACT US: +255 22 2181918. +255 22 2181941, +255 784 440272, sas007tz@yahoo.com Plot No. 84/36G Rashid Kawawa Road Opp. Biafra Play Ground Kinondoni
OFFICE SPACE AVAILABLE
Along Nyerere rd, next to Dar Group Hospital - TAZARA
Ample Parking Space | Wireless Internet | CCTV Cameras | A/C | Security Warehouse a total of 480 sqm, Office spaces from 360 sqm to 65 sqm Showroom space available for Banks and Big Shops
comfort@mek-one.come | +255 718 195 495
90% SOLD
City Homes
From Tshs.
69M/=
is a housing estate project. You may pay for your home on easy installments within ten(10) years. You have one(1) year Grace period, Free of interest . Business people and employees are welcome. Details: 1. Get your application form now at our office, Amani place Building 7th Flour, Ohio Street opposite Serena Hotel. 2. Homes may be customised to meet your needs. 3. Deadline for applying and returning application form is Friday 31st July 2015. 4. Down payment is 1.9% (one point nine percent). 5. Project location: Kigamboni. Contact:
Mob: +255 763 293 184, +255 787 407 207, +255 766 724 944 Tel: +255 222 196 874, Fax: +255 222 123 562 Email: info@kopanyumba.co.tz Web: www.kopanyumba.estate Office: Ohio Street, Amani place Building, 7th floor - Opposite Serena Hotel.
ABLA COMPLEX
FOR RENT
Mikocheni - Along Garden Rd.
Office space 13.5 Sqm + Vat + Service Charge Shops Available for $700 + Vat + Service Charge
Chesan
CHESAN APARTMENTS are elegantly designed 3 bedroom luxury apartments located in Kileleshwa along Gatundu Road. It comprises of 56 units within an acre of land.
APARTMENTS
KILELESHWA
3 Bedroom master en suite with SQ
Price:
Starting at
Ksh. 16 M
th
4 Floor, Nginyo Towers, Koinange St. Tel: 020 222 5338, 0735 126 839, 0726 790 685, 0728 992 531 P.O Box 19018-00100, Nairobi Email: info@lionsproperties.co.ke Website: www.lionsproperties.co.ke
REAL ESTATE The ABCs of REAL ESTATE MARKET EXTRAORDINARY ASSUMPTION an assumption within an Appraisal that is so essential that the value opinion would be erroneous if the assumption proved to be false. Compare with HYPOTHETICAL CONDITION. Example an appraisal of proposed housing subdivision was based on the extraordinary assumption that it would sell approximately 100 developed lots per year. If the absorption rate proves to be invalid, the value opinion of the appraisal is also invalid
WE’VE MOVED!
CONTAMINANT a substance element, or compound that many harm humans or other forms of life if realised into the environment. Refers to concentrations that are above acceptable levels and /or are in a location where they should be found. See maximum contamination level. Example asbestos, benzene, radon, PCBs , and lead – based paint are contaminants. Tests for these substance are commonly prepared as part of the due diligence process in the purchase of financing of real estate. Testing for same is routine; for others, tests are done only if property is suspect. For example, benzene may result from a leaking petroleum storage tank, perchloroethylene from dry cleaner disposals, and PCBs from disposed electrical transformers. Normally, a property would be tested for these only if there were reason to suspect their presence. TURNKEY PROJECT development in which a developer completes the entire project on behalf of a buyer; the developer turns over the keys to the buyer at completion, Example Many government –owned public housing project are turnkey projects. A private developer undertakes all activities necessary to producing the project including land purchase, permits, plans, and construction, and sells the project to the housing authority. UNIT OF COMPARISON in an appraisal, a device used to compare the price paid for comparable properties of different sizes. Example the following units of comparison may be used to compare similar properties in a given area • house – per square foot • theater- per seat or per screen • country club – per hole of golf course • silo- per cubic foot
Darproperty Tanzania Co. Ltd The publisher of The Darproperty Magazine has relocate its offices from Mikocheni Bima Road to Mikocheni Msuya St. House No.29 The relocation was necessitated by the need of for more space, security, privacy & convinience to our esteemed clients.
REZONING an action to change the designation of subject parcel or group of parcels on the zoning map. The effect of rezoning is to change the permitted uses for the affected parcels. See downzoning. Example brown, whose property was zoned for low- density residential, petitioned the city for a rezoning to allow construction of an apartment building.
Office hours: Monday - Friday 8:30AM - 5:00PM.
QUITCLAIM NEED A need that conveys only the grantors right or interest in real estate, without station the nature of the rights and with no warranties of ownership. Often used to remove a possible cloud on the title. Contrast with general warranty need. Example: it is discovered during a tittle search that a certain property was at one time held by a partmentship that later abandoned the property. To obtain a marketable title, the current owner obtain quitclaim deeds from all partners in the old partners in the old partnership
We will continue to offer the same quality services and support to everyone.
Mikocheni B - Msuya Street, - House No.29 P.O. Box 105499 Dar es Salaam +255 22 2780 517 +255 784 238 962, +255 713 751 868 info@darproperty.net
PRL
ProLand Realtors Limited Registered Valuers, Property Managers & Real Estate Consultants
ProLand Realtors Limited Maendeleo House, 6th Floor, Monrovia Street P.O Box 29509- 00100, Nairobi, Kenya +254 727741501 www.prolandrealtors.co.ke info@prolandrealtors.co.ke
Residential Properties for Sale
Kaputei Gardens is an exclusive and elegant 5 bed roomed country homes in a gated community of four units only. Located in an exclusive area in Kileleshwa and developed on a 0.25 Acre parcel. Highlights Plinth Area 530 meters squared. 5 bedrooms all ensuite. Garages with extra parking spaces for visitors. Detached SQ and Guest wing 24 hrs security + panic buttons Family room
Sun Valley Estate phase 1, Lang’ata Kenya is a maisonette and double storey extension. The house is about 1,800 sq.ft earning a rent of Kshs 80,000 pm and the extension is 800 sq.ft. Fetching Kshs 30,000 pm. The property sit on approximately 1/16th of an acre with access to community facilities.
PRICE GUIDE KSHS 76 MILLION
PRICE GUIDE KSHS 17 MILLION
Commercial Properties for Sale & To Let
JKUAT SRBS Tower is situated on George Padmore Road on 1.93 acres in Kilimani area. The plot is currently being developed with a new office block measuring a gross built up area of 25,876 square meter. The building has 15 stories and 4 levels of basement parking. The typical office floor in the tower is divided into two individually wings to lease to corporate clients. The ground and first floor are more adapted to commercial functions. FOR RENTAL OR SALE CONTACT US FOR DETAILS
Crescent Business Park is located along Parklands Road, Opposite MP Shah Hospital, It offers a modern environmental friendly 10 storey office building with the following amenities: 4 levels of basement parking in addition to 2 podium level parking, 4 high speed lifts, 3 fibre connection KDN, JAMII and ACCESS Kenya digital fixed line, 2 GSM masts on site green environment and friendly, led lightning , to lower consumption and operating costs, generator back up power, borehole and large capacity 250,000 litre water storage, CCTV and access control monitoring the building 24 hrs, security control desk at ground floor. FOR RENTAL CONTACT US FOR DETAILS
ProLand Realtors Limited Making the Real Estate Difference!
PRL
ProLand Realtors Limited Registered Valuers, Property Managers & Real Estate Consultants
ProLand Realtors Limited Maendeleo House, 6th Floor, Monrovia Street P.O Box 29509- 00100, Nairobi, Kenya +254 727741501 +254 711640512 www.prolandrealtors.co.ke info@prolandrealtors.co.ke
PROPERTY FOR COMMERCIAL RE-DEVELOPMENT FOR SALE BY TENDER HOSPITAL ROAD, UPPER HILL CBD 0.95 ACRES ProLand Realtors Ltd (the appointed Sole Selling Agents) invites tender bids for the purchase of a prime property situated at the junction of Hospital Hill Road and Menengai Road in Upper Hill CBD, Nairobi. It is surrounded by Equity Centre, KCB Towers, Britam Towers and the World Bank. The Property is 0.9585 acres and is suitable for commercial office, hotel or retail re-development. The Title is a leasehold tenure for a term of 99 years from the 1st of Feb 1994. Tenders must be submitted in accordance with the Rules of the Tender Process and in sealed envelopes bearing the correct tender name (as above). A bank guaranteed cheque for KShs. 500,000 made out to Proland Realtors Ltd must accompany each tender. In the event that a tender is accepted by the Vendor but reneged upon by the person or institution making the tender offer, the Vendor will retain the KShs. 500,000. All persons or institutions whose tenders are rejected by the Vendor will be refunded the KShs. 500,000 paid by them. Tenders should be deposited at ProLand’s Office in Nairobi and must be received by 3 PM on July 10th 2015. Tenders will be opened on July 14th 2015 at 10.00 am at ProLand’s office in Nairobi in the presence of bidders or their representatives who choose to attend. Each prospective bidder shall indicate in their sealed envelope the amount of the proposed bid for the Property. The minimum price acceptable for the Property is Kshs. 550,000,000/=. Tender packs containing the Rules of the Tender Process, copy of the Title and other related documents are available from ProLand’s Office at a non-refundable fee of Kshs. 6,000 per pack. Viewing of the property is strictly by Appointment. The Vendor at his sole and absolute discretion reserves the right to accept or reject any bid, without having to provide any reasons for the same.
ProLand Realtors Limited Making the Real Estate Difference!
NOW AVAILABLE FOR RENT A modern, self-sufficient housing complex in Msasanii, Dar es salaam. Each apartment unit consists of 4 bedrooms ensuite. There is also an extra study/office room which can be used for any purpose. 2 rooms also have a large viewing balcony including access to the rooftop where you can have a view of the ocean.
LUXURY AMENITIES: •24 hours security •Water •Household waste collection •Compound lighting •Gymnasium and swimming pool maintenance •Parking •Data and Intercom hardware maintenance •24 hours CCTV surveillance •Entrance video recognition •Guest Parking •Backup generator and maintenance
AMArate Residence +255 782 786 999/ +255 712 786 999 shaheed@regentpark.co.tz, info@jabergroups.com
OPENING SOON A modern office complex that is expected to be ready soon in the heart of the city. Adjacent to Morogoro Road, along the corner with Msimbazi. Be halfway to everywhere and escape the traffic to both Masaki as well as Nyerere Road.
Al-falah +255 782 786 999/ +255 712 786 999 shaheed@regentpark.co.tz, info@jabergroups.com 34 | The Darproperty -July 2015
BUSINESS CENTER
OCEANFRONT SUITES
NOW AVAILABLE FOR RENT World Class furnished apartments with an amazing view of the Indian Ocean located conveniently in the heart of the business district along Samora Avenue. DETAILS AND AMENITIES: • • • • • • • •
3 and 4 bedroom Fully Furnished apartments Panoramic Ocean view Secure Parking High speed elevators 24 Hours Security Common Area Surveilance Near the Port Standby Generator
+255 782 786 999/ +255 712 786 999 +255 784 202 212/ +255 789 199 511 shaheed@regentpark.co.tz
Experience Luxury In the heart of the Business District
Regent Business Park
NOW AVAILABLE FOR RENT Non Partitioned
Partitioned Rest in Abso
lute Comfort
NEW AVON HOTEL Three delightful Accomodation choices to choose from. Each room includes high speed WiFi and a flat screen TV among other amenities. Choose from a wide selection of delicacies from our room service menu and bask in extreme relaxation at the A1 Spa
Reserve@NewAvonHotel.com GM@NewAvonHotel.com
0768 002866 0688 002866 0658 002866
240 SQ M, 270 SQ M, 120 SQ M and 50 SQ M Available Location: Behind Shoppers Plaza Mikocheni
+255 782 786 999/ +255 712 786 999 email: Shaheed@regentpark.co.tz
TANZANIA MORTGAGE MARKET UPDATE Highlights: • The mortgage market has continued to grow steadily, recording an annual growth rate of 59% (with a growth rate of 23% recorded only in the last quarter of 2014). • 19 lenders are now offering mortgage products with more due to enter the market • Outstanding mortgage debt stood at TZS 248 billion. • Average mortgage debt size was TZS 69 million equivalent to around USD 41,000 • The ratio of outstanding mortgage debt to Gross Domestic Product (GDP) stood at 0.46% • Mortgage debt advanced by top 4 lenders accounts for 67% of the total outstanding mortgage debt • High interest rates and lack of affordable housing remain the major constraints on market growth • Mortgage debt advanced by Tanzania Mortgage Refinance Company (TMRC) to mortgage lenders accounted for 14% of the market’s outstanding mortgage debt. Africa’s interest rates reduction campaign which ran for six months in 2014, interest rates on mortgage lending went as low as Figure 1 – Tanzania Mortgage Market
16% (for Bank of Africa) from the common 18% to 21% range as offered by most lenders. Figure 1 below shows the trend of mortgage lending both in terms of amounts over the year; Increasing Competition as New Lenders Enter the Market: As at end of December 2014, 19 different banking institutions were offering mortgage loans, with the number expected to increase even further as more lenders continue to launch their mortgage loan products. The mortgage market was dominated by four top lenders, who amongst themselves command about 67% of the mortgage market. Equity Bank was a market leader commanding 20% of the mortgage market share, closely followed by Azania Bank which has the longest presence in the market with about 19% of the market share. Stanbic Bank and Commercial Bank of Africa followed Azania Bank with 16% and 12% of the market share respectively. The market experienced one new entrant (TIB Development Bank) in the third quarter of the year and there – TZS outstanding
300
250 200 150
Mortgage Debt Outstanding TZS billions
100 50
. Mortgage Market Growth: The mortgage market in Tanzania has been growing steadily as the pace of housing investment picks up. As at 31st December 2014 total lending by banking sector for the purposes of residential housing was TZS 248.35 billion, which is equivalent to USD 146 million. This represents an annual growth of 59%. Total number of mortgage loans also grew rapidly, from 2,784 at the beginning of 2014 to 3,598 by end of December 2014, being an increase of 29%. Factors attributed to this increase include increased awareness on mortgage loans among borrowers, public awareness campaigns by banks offering mortgage loan product, favorable interest rate environment during the year –with Bank of
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Mar-14
Feb-14
Jan-14
Dec-13
0
prospects that large banking institutions such as NBC and NMB will enter the mortgage market as competition in the traditional banking products continue to intensify.
for the most part continue to be expensive beyond the reach of the average Tanzanian. High interest rates offered by mortgage lenders also pose as another impediment to the growth the mortgage market. The 182 days T-Bill rate ranged from 13% to 15% during 2014, whereas interest rates offered by mortgage lenders continued to vary between18% to 21% (with Bank of Africa going as low as 16% in their six-month interest reduction campaign). The recent decline in the 182 days T-Bill rate as low as 8.99% towards the end of March is however promising a positive impact on all forms of long term debt, including mortgages. Positive Initiatives to Boost the Mortgage Market: The continuing projects by National Housing Corporation (NHC) being carried out from the company’s 2010-2015 strategic plan focusing on high, medium and low income earners are expected to have a positive impact on the mortgage market. Likewise the Public Servants Housing Scheme which is being administered by Watumishi Housing Company (WHC) is specifically tasked to build 50,000 affordable housing units in the next 5 years in various phases is expected to fill the affordable housing gap in the market as Public Servants will be able to buy the houses by taking cheap mortgages of between 10-and-13 per cent, repayable in 25 years. Most Pension funds are also actively engaged in advancing mortgage loans to their members. NSSF is also embarking on a large housing development in Kigamboni which will bring to the market a supply of 7,460 housing units in the next 3 years. It is also encouraging to see that private developers are also actively engaged on the supply of housing activities. Avic International is developing Avic Town in Kigamboni with plans to build 5,000 housing units in the next 3 years. Furthermore, Tanzania Buildings Agency has already embarked on a special project of constructing 10,000 affordable housing units under the initiative of the government. All these initiatives are expected to further boost the growth of the mortgage market.
Figure 2 shows market share for top eight mortgage lenders, in terms of outstanding Tanzania Mortgage Market as Compared mortgage debt. to the East African Neighbors: Obstacles to Growth of the Mortgage Compared to other countries in the region Market: Tanzania still has a relatively smaller Demand for housing and housing loans mortgage market, although it is growing remains extremely high but is constrained by rapidly. Mortgage debt outstanding as a inadequate supply of affordable housing proportion of Tanzanian GDP was equivalent and high interest rates. The current housing to around 0.46% of Gross Domestic Product deficit in Tanzania is estimated at three at the end of 2014. This is lower than its million housing units with a 200,000 unit East African neighboring countries. Figure annual demand1. Most lenders offer loans 3 below shows mortgage debt to GDP for for home purchase and equity release while selected countries including Kenya, Uganda a few offer loans for self-construction which and Rwanda.
Figure 2 – Mortgage Market Share
3%
EQUITY BANK TANZANIA LIMITED
3%
5%
AZANIA BANK LIMITED 20% STANBIC BANK (T) LTD
5%
COMMERCIAL BANK OF AFRICA (T) LIMITED EFC TANZANIA M.F.C LIMITED
12%
CRDB BANK PLC 19%
Housing Finance Project (HFP) which has overseen the establishment of the Tanzania Mortgage Refinancing Company (TMRC) which is playing a key role in developing the mortgage market. This report was shared to Darproperty Tz by Mr. Oscar Mgaya Chief Executive Officer Tanzania Mortgage Refinancing Company Ltd.
BARCLAYS BANK (T) LIMITED 16% KCB BANK TANZANIA LIMITED
Trends on Average Loan Size: Average loan size as at 31st December 2014 was TZS 69million, which is equivalent to USD 41,000. The average loan size for 2014 has slightly increased from that of TZS 62million (USD 38,000) in 2013. The average loan size across mortgage lenders varied greatly, reflecting different strategies and customer bases. Akiba, EFC and DCB who target lower income customers had much lower average mortgage loan sizes than say Stanbic Bank whose average loan size was TZS 293million.
Table 1 – Total Mortgage Debt Outstanding by Lender S/No
Mortgage Lender
No. of Accounts
Amounts in TZS Billion
% Market Share
1 EQUITY BANK TANZANIA LIMITED
82
50.52
20%
2 AZANIA BANK LIMITED
711
46.77
19%
3 STANBIC BANK (T) LTD
132
38.71
16%
COMMERCIAL BANK OF AFRICA (T) 4 LIMITED
238
29.76
12%
5 EFC TANZANIA M.F.C LIMITED
990
12.57
5%
6 CRDB BANK PLC
139
11.97
5%
7 BARCLAYS BANK (T) LIMITED
69
8.45
3%
8 KCB BANK TANZANIA LIMITED
57
8.11
3%
9 DCB COMMERCIAL BANK PLC
771
7.94
3%
10 I & M BANK TANZANIA LIMITED
36
7.48
3%
A key element in the growth of the mortgage market in Tanzania continues to be the provision of long term funding both in the forms of refinancing and pre-financing by the TMRC. The overall contribution of TMRC in the mortgage market in 2014. Currently refinancing and pre-financing mortgages advanced by TMRC to banking institutions is equivalent to 14% of the total outstanding mortgage debt.
11 BANK OF AFRICA TANZANIA LIMITED
59
7.37
3%
12 AFRICAN BANKING CORPORATION (T) LTD
35
6.55
3%
13 EXIM BANK TANZANIA LIMITED
26
4.94
2%
14 NATIONAL MICROFINANCE BANK (T) PLC.
23
3.13
1%
15 CITIBANK TANZANIA LIMITED
14
2.46
1%
With the recent approval of USD 60 million additional funding by the World Bank through the International Development Association (IDA) for the Housing Finance Project in Tanzania, TMRC‘s contribution to the growth of the housing market is expected to significantly increase over the coming years as the new financing will build on the achievements of the ongoing 2010
16 AKIBA COMMERCIAL BANK LTD
207
0.61
0%
17 TANZANIA INVESTMENT BANK
3
0.50
0%
18 FIRST NATIONAL BANK TANZANIA LIMITED
5
0.44
0%
19 NIC BANK TANZANIA LIMITED
1
0.08
0%
3598
248.35
100%
TMRC Supporting Market Growth through Provision of longer Term Funds to Members:
TOTAL
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PATRON PAGE NO ABLA......................................................................4 ADAMAS............................................................11 AL-FALAH...................................................34&35 AVIC TOWN.........................................................5 BERGER ................................................................38 BOA BANK..............................................................1 CHANDARANA...................................................45 CHESAN..............................................................30 CHOKOLE.............................................................41 CHUDASAMA......................................................20 CITY HOMES......................................................27 CRDB BANK...........................................................3 DEGE..........................................................1,24&25 ELEGANT.............................................................21 FNB......................................................................48 G4S..............................................................18&19 HAMIDU CITY PARK...........................................39 IVORY TOWER................................................8&9 JAMII FORUMS..................................................47 LAMUDI ...............................................................29 LONGONOT GATE............................................28 MASUMIN............................................................23 MEK ONE.............................................................22 PRL.................................................................32&33 REEF APARTMENT.................................................10 REMAX.............................................................1&13 SAMSA ...............................................................17 SIMBA CEMENT...................................................1 TANGANYIKA ESTATE.....................................6&7 TBS.........................................................................16 TEMEKE PLAZA.....................................................15 TWIGA CEMENT....................................................2 UTT............................................................................4 WULKAN..............................................................20
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