In a groundbreaking move set to reshape the architectural landscape of Kariakoo, the National Housing Corporation (NHC) officially entered into contracts with 21 real estate developers on Monday, marking a significant investment of 270 billion TZS. This transformative initiative is poised to redefine the skyline of Kariakoo, a bustling commercial hub in Dar es Salaam.
Under the terms of the agreements, the developers commit to injecting a collective sum of 270 billion TZS for the construction of residential and commercial buildings on an NHC plot currently valued at 59 billion TZS. This ambitious undertaking involves the demolition of 16 existing structures accommodating 190 commercial and residential tenants, making way for the construction of modern edifices, as revealed by Mr. Hamad Abdallah, the Director General of NHC.
Mr. Abdallah expressed optimism about the positive impact on NHC's financial performance, anticipating a substantial boost in turnover. Upon completion, the project is expected to accommodate a total of 2,011 tenants, with 1,258 designated for shop spaces. Additionally, 500 warehouses will be established in Kariakoo, contributing to the expansion of the commercial landscape.
The residential component is set to experience a significant surge, increasing from the current 72 slots to 253. The construction timeline is scheduled to commence on February 1, 2024, contingent on the timely acquisition of building permits currently in the issuance process.
Mr. Abdallah announced that some current tenants are expected to vacate their premises on February 1, 2024. Those with a good rental payment record will have the opportunity to return to their previous dwellings upon the completion of the ongoing projects.
In adherence to NHC's partnership policy, the corporation will initially hold a 25 percent stake in each building, with private developers owning the remaining 75 percent. After a decade, NHC plans to increase its ownership to 50 percent, followed by another increment to 75 percent after 15 years.
Explaining the rationale behind this structure, Mr. Abdallah clarified that NHC aims to ensure a fair distribution of returns, allowing investors to recoup their initial investments before the gradual increase in NHC's ownership over time.
This agreement aligns with NHC's joint venture policy, last updated in November 2022. Mr. Abdallah emphasized the flexibility provided to investors through unit title arrangements, allowing them to use their units as collateral for bank loans.
The 21 projects are part of a larger pool of 87 initiatives for which NHC has sought developer partnerships since the 2022 policy review. Notably, 39 of these projects are located in Dar es Salaam, with Kariakoo alone hosting 24 projects due to its appeal to investors.
Mr. Jerry Silaa, the Minister for Land, Housing, and Human Settlements Development, witnessed the contract signing ceremony and applauded the government's directive to expedite due diligence processes. He emphasized the government's commitment to seeing NHC forge strong partnerships with financially capable developers for the overall growth of Tanzania's real estate sector.
In conclusion, this landmark collaboration between NHC and the 21 developers not only signifies a major financial injection into Kariakoo but also reflects a strategic move to invigorate Tanzania's real estate sector, underlining the government's dedication to fostering robust partnerships in this crucial industry.