Rediscovering Real Estate in Somalia: A Paradigm Shift

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Property management and acquisition in Somalia has been changing in the last couple of years; from using the local Dulaal or local elders as property sale intermediaries, to having a proper real estate association. This silent but important shift is crucial as it inspires confidence to both the locals and foreign investors, especially with the renewed interest in Somalia as an investment destination.

The Somalia Real Estate Association (SREA), established in 2014 out of the need to provide professional assistance to the real estate sector, and also to assist the government to establish a proper regulatory framework. Mr Mohamed Abdi, popularly known as “Martello”, is the founder and the director of SREA. He spoke to TSI about the changes that have occurred overtime in Somalia’s property market.

What is the role of SREA?
The idea is to bring together all those involved in the real estate business — the land owners and developers — to change the mode of trade and ensure a standard systematic structure for the country to rely on.

How do you intend to do this?
The association aims at streamlining the sector. We would like to collect all the information that is available, compare with what works in the region, and use the best to our benefit. The advantage that we have at the moment is that as the government continues to restructure itself, we are in a better position to work in sync with each other, and provide expertise and guidance on the best practices. For instance, the construction of new buildings is happening very fast, but we want to ensure that even without a strong government regulation, we still build quality houses that meet high standards. The current development in the capital is mainly free for all. Therefore, we have to work on regulation and we are working with the government to provide a regulatory framework that will guide the industry.

How fast is real estate changing in Mogadishu?
A lot is changing. Today, there are a lot of highrise buildings coming up in Mogadishu that will be able to meet demand for office and residential spaces. There are limited flexible options at the moment. The best is to rent a house that you can use as both office and for residential. The rent has increased from $300 a month five years ago, to a whooping range of between $2,000 and $3,000. The value of property has shot up as the demand is high.

What does real estate need to thrive?
The country is in dire need of housing laws and regulations, which are none existent. Currently we are working on drafting the law. We have approached a law consultancy firm, which is in the process of drafting the law. The next stage will be to lobby for it and ensure its legislation.

So, how does the process of acquiring land work?
In Somalia, there is no property registry. Land title deeds were issued back before the war broke out. Despite this, people are buying property worth millions of dollars. So, if you want property, you provide the details to be verified using different mechanisms. At the moment, there is only one person who holds all documents from the former land registry, dating back to the good old days. He is responsible for verification before one acquires land. Most of the time, the information is accurate and that is why the property business in Mogadishu is moving really fast.

How much does this cost?
This process will cost you a percentage of the value of the property you are looking for, normally one per cent, but it keeps varying. What is the role of lawyers? A public notary office has to verify this information. Many people in Somalia do not have identification cards, and this is where the notary service comes in to authenticate and give confirmation that the land belongs to the said owner.

Without national identification cards, it must be difficult to verify who really owns the land?
In Somalia, we know each other and the real identification is not the one that you get on paper. All you have to do is to get the name of the person and in few days, the information will be verified.

How does this work?
There is an elder somewhere, who knows that this is the daughter or son of so and so. It is based on clan identification. Everyone is interconnected somehow. There is no way someone can cheat their way out of this system. Most of the time, guarantors are used to confirm or show proof of land ownership.

How serious is land or property conflicts in Somalia?
The next big problem after tribalism in Somalia will be the issue of land ownership. Most of the land, as explained, is owned by parents or elders, mostly through inheritance. The problem, therefore, will arise from property disputes involving families. Most Somalis never leave a will and most of the elders and parents are ageing. The requirement before any sale or land transfer, is that all the siblings have to sign an agreement. But in a culture like ours where polygamy is allowed, you are never too sure how many children your father had, and where they are spread. This will be the biggest hurdle and it has to be solved in a careful manner to avoid land conflicts.

How is your collaboration with the government?
We are working on creating building codes and town plans so that we have orderly property investment. This involves working with the government institutions to get proper plans that show the location of road reserves, street and other social amenities. It is important to note that we are not just taking care of our interests as a business groups, but we are also trying to build the capacity of the government with issues like title deeds management and the need to use biometrics, including GPS systems, to map the city.

What are the current and future prospects?
Most of the expatriates live in hotels due to lack of appropriate and secure housing. This, however is bound to change soon. For instance, the Jazeera and Dar-salaam estates will provide approximately 10,200 housing units when completed in a few months. What we have in mind is to create a gated community that has all the amenities that one may need, including water, electricity, high internet infrastructure and proper roads as well as other social amenities. We have also factored in the issue of security, and instead of each person providing their own guards, we are looking at contracting security companies that will provide overall security. The number of people who need accommodation and rental spaces is high. Therefore, we also have to provide luxurious and convenient options. Many people are advised to settle closer to the airport for security reasons, thus making the prices of property around these concentrated areas to skyrocket. In the near future, however, we see this changing due to new developments within and outside Mogadishu.

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