Bank of Abyssinia Loses Landmark Plot as City Reclaims Skyscraper Site

Oct 5 , 2025. By NAHOM AYELE ( FORTUNE STAFF WRITER )

A 17,400Sqm plot in near Mexico Square, once earmarked for the Bank of Abyssinia’s ambitious 60-story headquarters, has been repossessed by city authorities. Plans included a glass-crowned tower with a shopping mall, cinema, lecture hall, and sky garden, intended to reshape the city’s skyline. Shareholders gathered at the Adwa Zero Museum last week expecting progress updates. Instead, they learned the land had been reassigned for a taxi terminal.

The Bank of Abyssinia is wrestling with the loss of a prime plot of land once leased for its future headquarters, a setback that has left shareholders unhappy, directors frustrated, and city administrators firm in their position.

The Bank's directors informed shareholders who met last week at the Adwa Zero Museum that the city administration had seized the plot in the Mexico Square area, near the Wabi Shabelle Hotel, on Abeba Aregay Street, and returned it to the Land Bank. The news came as shareholders were expecting an update on the planned 270-metre, 60-story headquarters that would have crowned Addis Abeba’s skyline. Instead, they learned that the city administration had terminated the lease and repurposed the land for a taxi terminal.

The disappointment in the hall was evident, with shareholders expressing a mix of fury, disbelief, and concern about the implications for the Bank’s future plans.

Tesfaye Haile, a shareholder, demanded clear answers from the Board.

“We want to know what exactly happened to the plot,” he insisted, urging the Bank’s directors to communicate more transparently and to pursue every avenue to reclaim the land.

Another shareholder, declining to give his name, called the loss “deeply demoralising” and warned that it was not enough to simply say the land had been transferred to the Land Bank. He questioned whether the transfer was driven by the government’s need for the site or by delays in construction, pressing the Board to disclose whether it had done enough to protect shareholder interests.

“The lack of clear communication leaves investors uncertain about the status of the project,” he said.

The emotional response was echoed by another shareholder Wedalat Gedamu, who described the loss as “painful.”

“This is our property, and losing it is painful,” she said, questioning the fairness of reclaiming land where work had already started and compared it to the treatment of homes forced to relocate.

“Even when a single house is demolished, the Administration pays compensation," she said. "How can such a large Bank be silent when its land is taken without due explanation?”

Bank of Abyssinia had acquired the plot through the City Administration’s placement process and signed a lease agreement. In December 2020, its executives signed a contract with China State Construction Engineering Corporation (CSCEC) to build a futuristic headquarters on a 174,000 sqm plot, featuring a shopping mall, cinema, lecture hall, 20-story annexe, sky garden, and a distinctive diamond-structured glass crown incorporating the Bank’s logo.

But instead of breaking ground, the Bank found itself in a battle over property rights, city regulations, and shifting priorities. According to Abyssinia Bank's Board Chairman, Mekonnen Manyazewal, a retired public service person who once served as a minister of Industry, the Bank had already begun preliminary works on the site, including soil testing and shoring activities, when the city reclaimed the plot.

The area, once destined for a skyscraper, is now a transport hub, "Areqe Factory Terminal" serving residents commuting by taxi to Torhayloch, Ayer Tena, and Alem Bank neighbourhoods. The site is adjacent to the "Wabi Shabelle Terminal," which was built on the former grounds of the hotel after the city acquired a 3,000Sqm plot for public use.

Not all shareholders viewed the episode as a disaster. A few suggested that halting the skyscraper project might actually shield the Bank from financial risk, especially given the uncertain economic climate.

“Constructing a skyscraper now is nothing short of wasting money,” said one shareholder, arguing that the Bank should focus on strengthening its existing branch network and services rather than committing to an expensive and high-profile project.

In response to the heated exchanges, Mekonnen, and the Bank's President, Bekalu Zeleke, addressed shareholders, conveying empathy with the shareholders’ frustration while seeking to clarify the situation. Mekonnen acknowledged the loss was difficult to accept.

“What happened to the plot also hurts our feelings,” he said, assuring shareholders that the Board had filed formal complaints with government offices. “We've not yet received a sufficient and satisfactory response from any government body.”

According to Mekonnen, the Bank of Abyssinia is seeking a replacement plot. Bekalu echoed Mekonnen that the Board had done all it could to prevent the repossession.

“The Board should not be blamed for this outcome,” he said.

Bekalu informed shareholders that the city Administration had provided multiple explanations for the seizure, some formal, others informal, "but none that offered full clarity." According to him, the decision could be part of broader trends in the city’s development policy, where land is often reclaimed for public use, sometimes with little compensation to those affected. Bekalu stressed that the loss would have “an undeniable negative impact” on the Bank, not only in finances but also in reputation.

However, he pledged that the Board and his managment team would continue to defend shareholders’ interests, even if the skyscraper project could not be revived.

Officials at the Addis Abeba City Administration defended their decision. According to Mekonnen Terefe, deputy head of the Land Development Office, the lease was terminated because the Bank had "failed to start construction within the contract’s timeframe." He stated that the city faced an ongoing issue with developers acquiring land “under the guise of development and then leaving it idle,” which compelled the Administration to take action.

“There was no intention to harm the Bank,” Mekonnen told Fortune. “But when a leaseholder does not honour the agreement, starting construction on time, the city has no choice but to act.”

According to Mekonnen of the Land Development Office, the city had allocated resources to relocating residents and demolishing old buildings to facilitate new developments. He insisted the rules apply equally to all developers, regardless of their size or influence.

“We're happy when good buildings rise in our city," he said. "But, legal action must be taken against those who do not follow the law.”

The law governing urban land leaseholdings, proclaimed in 2011, imposes a penalty of seven percent of the total lease price and, ultimately, terminates the lease and repossession of the land by the authorities. The law sets up to 24 months for small projects, 36 months for medium projects, and 48 months for large developments. Missing those deadlines allows the government to terminate the lease and require the leaseholder to remove any unfinished structures within six months at their own expense.

Legal experts weighed in on the controversy. Yared Seyoum, a legal specialist on land disputes, argued that the Administration’s move was within the law.

“If the Bank failed to build within the agreed timeframe, then the repossession of the plot falls within the legal rights of the city Administration,” Yared told Fortune.

According to Yared, once a lease contract is revoked and the land reassigned, it is nearly impossible to reclaim it.

“The Bank should now focus on continuing discussions with the city Administration to seek either compensation or an alternative site for its planned headquarters,” he said.

PUBLISHED ON Oct 05,2025 [ VOL 26 , NO 1327]