Mogadishu is an old city. It is more than 2,700 years old. It was built by Italians and the Somali people. Today, there is a new Mogadishu coming up, built solely by the Somali.
The Mogadishu skyline is getting edgy and blurred. Every direction one turns, there are sights of storey buildings under construction. The sight from the air offers a much better view, as from high up, one can’t miss the colourful roofs of blue, maroon and silver.
The sight speaks of great changes on the ground. The real estate industry in Somalia has taken off. After years of civil war, the bullet riddled walls are being refurbished. Ruined houses are being brought down. In their place, new structutures are coming up in their hundreds. There are single housing units, and there are apartment housing that go up several floors. Offices are being constructed and occupants are moving in even as the garden in front is yet to be completed.
The sounds of gunshots have been replaced by those of the hammer. Abdirahman Duale of Champion Engineers — a firm that is involved in the construction of some of the huge buildings across Mogadishu — says that the demand for housing in Somalia is very high at the moment. But that, he says, is not the only great thing about the real estate industry in the country. “The cost of construction and construction materials is relatively low in Mogadishu compared to other cities like Nairobi. This is one of the factors pushing the real estate boom,” he says at his office in Old Mogadishu. Across the street, a building is going up and a few metres away is one of the largest malls in Mogadishu.
Those investing in the real estate sector in Somalia, according to Mr Duale, are the Somali people who are returning from abroad and locals who have made money doing business in the country. The real estate sector in Somalia is so attractive right now that the CEO of International Bank of Somalia (IBS) Mr Hassan Yusuf says it is one of the areas he would recommend without hesitation, to any investor.
He explains why: “If an investor was to walk into my office seeking advice in which sector to put his money, I would definitely mention the real estate sector. The demand is immense. And with demand, any investor can be assured of returns once they have established their venture.” But such an investor will not just walk into Hassan Yusuf’s office and walk out with only a piece of advice.
In case the investor is in need of financing, the IBS bank boss says there are financing options that the bank can offer. “Under one of our products, real estate advisory, we can offer them the information that they need and then under housing finance we can provide financing on personal and institutional construction and infrastructure development projects,” he explains.
Corporate financiers are not the only group that has seen the potential in the real estate sector in Somalia. Takaful Insurance, a firm that moved into Somalia early this year, saw it as one of the areas that could not be ignored in terms of risk management provision.
Takaful Insurance’s Mogadishu branch manager Mr Abdirizack Bare offers an insight into some of their products: “At the moment, we can write covers on motor insurance, medical insurance, insurance against fire, burglary, personal and group accident covers as well as marine and livestock covers. political violence and terrorism cover is also on offer.”Abdirahman Duale of Champion Engineers.
Specifically, fire, burglary and political violence and terrorism cover are mainly taken for business premises and housing units among others. He says that it is unavoidable. At the moment, Takaful Insurance is the most active insurer in Mogadishu.
As for financiers, IBS is not alone in offering financing options for those investors interested in getting into the real estate sector. Salaam Somalia Bank (SSB), one of the key players in the banking industry in the country, also has financing packages for both mega-construction projects and small time housing for individuals.
Mr Mohamed Ali, the PRO of the bank, says that they offer both personal financing and corporate financing. So, the reality at the moment is that the demand, the financing and the cover are all present in Somalia. The real estate industry is set to only get better. Duale concludes by saying that as the security situation in Somalia becomes more stable and the road network gets better, there is no knowing what lies ahead for the real estate sector.