News Analysis | Jan 05,2020
A medical doctor serving at the VA Medical Centre in the United States, the 63-year-old Amanuel Tekle has been away from his native land for so long. Growing up in Addis Abeba's Seba Dereja neighbourhood, the search for a better life and opportunities caused him to move in 1983. It was a time of political turmoil and profound uncertainty at home that compelled thousands of his generation to flee far away.
Close to 30 years passed before Amanuel returned to have a presence in the land of his origin. He leased a 1,000Sqm plot where he built a villa in Ayat Tafo, Yeka District. He also owns a house in the United States, the place of his permanent residence. Little was he prepared, however, for the extreme difficulty of managing his villa in Addis Abeba from afar.
Thus, he decided to outsource the management of his house to a property management company and chose Apollo Real Estate & Property Management for the service. He signed an agreement with the company back in 2016.
Established in 2012 with the aim of administering the diaspora community's property in Ethiopia, Apollo is in charge of administering Amanuel's house, such as renting the house and collecting rent payments.
The company also provides services like advertising rental properties, interviewing and selecting the right tenants, collecting rent and administering properties on behalf of the diaspora.
Companies like that of Apollo handles all the day-to-day activities of the property, including seeking out tenants to rent the space, collecting monthly rental payments, maintaining the properties and maintaining the grounds.
Such companies also oversee residential, commercial and industrial properties, which include apartments, detached houses, condominium units and shopping centres. The property manager acts on behalf of the owner to preserve the value of the property while generating income.
Apollo is based in Washington, DC, but has a branch office in Addis Abeba on the third floor of National Tower. At the beginning of this month, the office of Apollo was crowded with customers looking for its services.
Some of the visitors wanted to consult the property manager on how to keep their house safe when they are away, while the others were there to sign agreements for property administration services.
Amanuel was among the crowd paying a visit to the company in a bid to renew his agreement, which operates with 13 employees and has 60 customers.
''The company saves me time, which I could spend managing the house,'' Amanuel told Fortune.
Century Shopping Mall, located in Gurd Shola, Yeka District, is administrated by Baladera Property Management & Investment Consultant.
Though the trend seems quite new, the service has been emerging in the capital over the past couple of years.
Baladera Property Management & Investment Consultant is another company engaged in the property management business. For the past five years, Baladera has managed buildings and residential houses.
Residing on the ninth floor of Selam City Mall located on Cameron Street, the company also consults on the finishing processes of buildings under construction. Currently, the company is an agent to 1,500 tenants.
Renting buildings and shopping malls, Baladera collects rent from tenants on behalf of the property owners.
Nega Asfaha, managing director of Baladera Property Management, says that many people do not have experience in outsourcing the management and administration of properties to property managers.
''Investors must develop the habit of outsourcing the management of their property,'' Nega said.
Investors who rent their office buildings sometimes find it hard to manage their property effectively. For this reason, they transfer the administration of their property, including the rent management, to professionals, which makes life easy for them, according to Nega.
The company currently works with 25 properties and buildings, while it has signed seven contracts for new projects. Century Mall, Zefmesh Grand Mall, Snap Plaza and Centrum Apartment are among Baladera's clients.
It also supplies raw materials for cleaning and maintenance services and has a capital of half a million Birr.
The service also helps tenants who wish to rent spots at different buildings. Endanluel Trading Plc, an establishment that has been in business for the past decade, is one of them.
Endanluel retails ready-made menswear that is imported from Italy. The company started the business in a rented space inside Lafto Mall. Its store sits on the ground floor of the building and has been selling clothes under the name Real Fashion.
After three years, the company, which is owned by Endegena Abebe and sells luxury brand men’s shirts and suits to customers such as diplomats, opened a second branch in Mafi Mall, which operated for nine months.
Endanluel also opened a shop inside Zefemesh Mall two years ago selling a brand named Kabalino Men's Wear after it was approached by Baladera.
Currently, Kabalino is found on Century Mall's ground floor selling ready-made menswear such as shoes, socks, suits and jackets to their targeted clientele.
"We plan to expand and open our shops in luxury hotels, and Baladera is consulting us on how to approach this," Daniel Yiheyis, general manager of Endanluel, told Fortune.
Endanluel pays nothing to Baladera for these services, according to Daniel.
Not only private companies but also Commercial Nominees Plc (CN), a company that is owned by Commercial Bank of Ethiopia, provides this service.
Established in 1958 with the joint force of the Commercial Bank of Ethiopia and the then Construction and Business Bank, Commercial Nominees is a pioneer in the service.
The service rendering company that was re-organized as an independent entity in 1993 operates with 33 branches, employing 385 permanent and 27,000 non-permanent employees.
It has been engaged in managing employees for private companies, the administration of 10 buildings, provident and employees benefit funds administration for 28 companies and real estate administration for eight investors.
The company also provides Western Union money transfer services, salary payment services for registered companies, CBE Birr banking services, facilitation of client businesses, buying and selling flats and buildings and collecting and delivering various confidential documents.
It also distributed over 90 million mobile cards a year, a deal which was cancelled when the service was given to Yimulu Mobile Service in the last fiscal year, according to Awegechew Abiye, operations manager for Commercial Nominees.
Currently, CN administrates the buildings of the Cooperative Bank of Oromia, Development Bank of Ethiopia, Helzer, all branches of the CBE and Seid Yaisn Shopping Centre, which has two branches in Jemo and Qera.
Commercial Nominees saw 1.3 billion Br in revenue from its various business segments and made 123 million Br in net profit in the last fiscal year, an increase of 162pc above the profit made five years ago, which was 47 million Br.
From these services Commercial Nominees gets three to 20pc commission, depending on the services it provides.
The company gets 4.5pc commission, or 65,000 Br a month, from administrating the Helzer Building, where it employees 48 employees.
It receives clients who submit expressions of interest requesting the services, open an account and present the necessary documents of their property. Clients who fulfilled the prerequisites will sign a contract depending on the services they require.
The company will also represent its clients in matters concerning inheritance, including standing in court on behalf of its clients by presenting the original paperwork signed by the client.
Tsedeke Yihune, shareholder and former CEO of Flintstone Homes, says that the property management companies should consider giving the full services of property management.
The property management industry has five major categories: security, cleaning, utility [water, electric and ventilation], building maintenance and social security, according to Tsedeke.
"The property managers usually don’t provide all these services," he said. "They probably give two out of the five."
Tsedeke also says that the business needs sufficient skilled manpower to provide the services.
PUBLISHED ON Sep 28,2019 [ VOL 20 , NO 1013]
News Analysis | Jan 05,2020
Radar | Sep 28,2019
Radar | Jun 01,2019
Radar | Nov 16,2019
Election 2020 coverage | Jan 13,2020
Fortune News | Feb 16,2019
Fortune News | Jan 05,2020
Radar | Jan 25,2020
Radar | Oct 12,2019
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