Tanzania Real Estate Investment Trust Starts Construction Of 50,000 Housing Units For Public Servants

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Watumishi Housing Company (WHC), a state run property developer and real estate investment trust (REIT) manager in Tanzania, has recently launched the Phase I of a five phase program to implement the Tanzania Public Servants Housing Scheme (PSHS) aimed at constructing 50,000 housing units for government workers.

The Phase I was launched by WHC CEO, Dr. Fred Msemwa, in a press conference in Dar es Salaam where he explained that 1,500 housing units spread in 11 regions will start to be constructed in the current fiscal year 2014/2015.

The Phase I starts with the construction of 694 housing units in Kigamboni, Bunju and Magomeni Usalama in Dar es Salaam, which is the city receiving most of the properties to be developed by WHC accounting for 3 out of 14 real estate projects.

The first stage will be completed by the construction of 40 housing units in Tanga region at Pongwe area and 56 housing units in Mwanza at Kisesa township, explained Dr. Msemwa.

The 710 remaining housing units will be spread in Arusha, Coast, Shinyanga, Mtwara, Lindi, Tabora, Dodoma, Morogoro, Ruvuma, Mbeya, and Kilimanjaro in a period between 8 to 18 months, Dr. Msemwa added.

According to WHC, this is one of the major projects undertook by Tanzania’s government to ease the public servants’ housing shortage with only 10,000 out of 650,000 workers provided with residential accommodation through mortgages or any other house purchase scheme.

This is why WHC has signed cooperation agreements with CRDB Bank, Azania Bank, NMB, Bank of Africa, and Exim Bank which will provide the government workers with mortgages which can be repaid in periods up to 25 years and at low rates between 11% and 13% per annum, almost half of the current average mortgage rate at over 22%.

According to the agreement, banks will pay 100% of the housing unit value and will directly deduct the corresponding installment from the public servants’ payment at the end of every month.

Even though the focus is on government workers, WHC has designed the projects to also serve the civil society in Kibaha in Coast region where it will build a satellite town with 1,000 housing units and supportive commercial infrastructure to benefit up to 5,000 residents.

WHC was established in 2013 seeking to reduce the Tanzanian housing shortage calculated at 3 million housing units and increasing at a rate of 200,000 per year, and to manage the first REIT established in the country (WHC-REIT) with the National Social Security Fund (NSSF), PPF Pension Fund (PPF), Public Service Pension Fund (PSPF), LAPF Pension Fund (LAPF), GEPF Retirement Benefits Fund (GEPF), National Health Insurance Fund (NHIF), and National Housing Corporation (NHC) as shareholders.