Tanzania Real Estate Sector Report

Sunday, 27 July 2008 00:00

Developments within the construction sector have benefited the Tanzania real estate sector through the creation of additional real estate space.

The Tanzanian real estate sector has not made significant contributions to the GDP over the last few years, but the government remains optimistic that the recent and planned developments will contribute to the continued growth of this sector.

The current development projects that are under way, as well as those that are being planned, have created opportunities for interested investors.

Today, the largest market for investors in the real estate sector can be found in office development, but there are also some opportunities in the development of retail, industrial and residential spaces as well.

Knight Frank, a UK headquartered global property consultancy agency and a large investor in the Tanzania real estate market has projected that the demand for office, retail and industrial real estate in the capital city of Dar es Salaam will remain strong.

In addition to this development, there is the pending passage of legislation that would govern estate agencies, the already amended Land Act, a court to arbitrate land disputes and plans to institutionalize housing financing.

With these developments in place,

the government continues to be hopeful that the real estate sector in Tanzania will begin to actively contribute to the GDP; it has taken several steps towards regulating the sector and the outlook remains promising.

According to Architect Makumba T. Kimweri, Chief Executive of the Tanzania Building Agency (TBA), the mission of the TBA is similar to that of a real estate dealer.

“We build houses, we sell houses,” he says, “and the money from that will build more houses.”

However, Mr. Kimweri says that the agency is not currently able to meet the needs of its large customer base.

“Up to now, the agency is capable of building only about 250 houses every year,” says Kimweri, “but our customers are about 350,000 in total. As you can see, the gap is very big."

In order to solve the problem, the TBA has developed a plan to share in the development of housing through a joint-venture with parastatals or other private investors.

The developments in construction services as well as increases in the overall population growth of the country have created a demand for real estate and the sector is, therefore, primed for investment.

As Mr. Kimweri spells out, there are many investment opportunities in real estate in Tanzania.

“Most people don’t realize the pace of development that’s happening here [and] I invite them to come and see for themselves,” he says.

Click here to read our FREE Tanzania Real Estate Report in full