Arada District Land Auction Sees Dwindling Interest

Nov 24 , 2024. By AKSAH ITALO ( FORTUNE STAFF WRITER )

The third day of land auctions in Addis Abeba saw one of the lowest participation rates, with many sites failing to attract sufficient interest despite it coming after a two-week postponement.

Held in the Arada, Addis Ketema, and Kolfe districts, the fourth round auction showcased a mixed level of enthusiasm among developers. With 543 bidders competing for 63 plots across three districts, participants expressed disappointment, where a third of the plots offered failed to draw bidders.

Despite being a prime business area, Arada saw one of the lowest bidder turnouts in recent years. Only 15 bidders participated in plots in recently cleared areas of Abuare and Bella. Of the 17 plots offered, 16 failed to attract sufficient bidders, with just one plot drawing four offers. The highest offer came with a bid of 141,201 Br for a square metre while Ayat Realestate S.C. secured the plot with a 45pc upfront payment, followed by Reality Realestate S.C., which offered 85,100 Br with a 60pc down payment.

This turnout sharply contrasts with last year’s auction in the same district, where 295 bidders vied for 22 plots in the recently demolished Piassa area.

Chale Abraham, head of land transfers at the Addis Abeba Land Development & Administration Bureau, noted the decline in both the number of bidders and land prices compared to the previous auction. In May, Awash Bank won 311,000 Br for a square metre in the same district while the first bid last year saw fierce competition reaching 406,667 Br for a square metre in Nefas Silk Lafto, which offered 39 plots and attracted 434 bidders.

“Perhaps prime areas have already drawn attention in previous auctions,” said Chale.

However, he considered the lowering of prices a positive development. “Even though more participants were expected, prices have stabilised.”

Despite a two-week delay due to low initial participation, Chale described last week’s auction as successful and announced plans to float another bid within a month, including the unclaimed plots.

The auctions align with the City Administration’s Corridor Development and Local Development Projects, designed to create new plots from recently cleared areas and reshape the city’s landscape. Winners of the auctions are required to settle payments within five years, with non-compliance leading to the transfer of plots to the runner-up. This policy is rooted in the 2011 lease proclamation, which uses bid price and advance payments as determining factors.

The bidding process was marked by anticipation and anxiety. At the Bole district land bureau hall, a metal box containing bid documents became the focal point as land administrators scrutinized submissions. While bidders awaited results with bated breath, critics examined the process, analysing winners, disqualifications, and unclaimed plots.

Out of 63 plots offered, 22 failed to attract sufficient bidders, and 85 bid documents were disqualified for not meeting requirements. Kolfe Qeraniyo District emerged as the standout, offering 23 plots and drawing 386 bidders. The plots ranged in size from 98sqm to 1,475sqm, attracting intense interest for residential purposes in areas less prone to urban renewal demolitions.

Addis Ketema District, offering 23 plots near Addis Sefer and Asko, attracted 164 bidders. The highest bidder, Kahlid Sheicho, secured a 103sqm plot for 72,815 Br for a square metre with full upfront payment. Another bidder, Desalegn Tasew, obtained a 196sqm plot with a bid of 42,000 Br per square metre, also paid upfront. Desalegn, a seasoned participant, expressed confidence in his strategy of targeting areas likely to attract individual bidders.

In Kolfe, Hanan Mohammed emerged as the top bidder, offering 130,000 Br a square metre for a 106sqm plot, with full upfront payment. The District’s location away from the city centre drew interest.

While stakeholders navigate challenges such as declining bidder interest and regulatory inconsistencies, experts emphasize the need for policies that prioritize inclusivity and infrastructure development.

Experts observed a decline in bidder interest in the Arada district, citing new regulations and bureaucratic hurdles that have made development financially burdensome. Elias Teklay, a lawyer specialising in land disputes, criticized the ambiguity and inconsistency of expropriation laws. He argued that simple circulars and letters often serve as de facto laws, leading to unpredictability and unfair evictions.

Elias also highlighted deficiencies in urban infrastructure, such as water and electricity, which he believes are critical to sustainable development. He advocated for clearer, more consistent regulations that avoid conflicts and ensure fair development processes.

“The absence of accountability has allowed abuses of power, including evictions that conflict with the city’s master plan,” he said.

Contrasting current practices with the public-focused development initiatives under the previous administration, Elias criticised the exclusionary nature of recent projects.

“Urban development should be inclusive and consider the needs of the broader community, not just facilitate a capitalist restructuring that disregards existing urban structures,” he remarked.

The fourth round of land auctions underscores the complexities of urban development in Addis Abeba. As the city reshapes its landscape, a balance between modernization and public interest remains critical.

PUBLISHED ON Nov 24,2024 [ VOL 25 , NO 1282]