The Prospect of Tanzania Real Estate Investment Market

Tanzanian real estate market is currently experiencing a huge surge of increased construction and real estate activities.  It appears that every investor is constructing a villa, an apartment complex, office tower, hotel or shopping mall and with the extremely exciting and promising oil and natural gas market, there are great expectations in the real estate sector.

But, will these expectations be met? Torrid growth in real-estate investment in the country is inseparably connected to the country’s political and economic stability, which has made Tanzania the most preferred investment destination in East Africa for global investors, developers, agents and lenders.

Undoubtedly, Tanzania is set to become one of Africa’s leading economic powerhouses driven by many factors including strong macroeconomic policies.

With enormous demand for residential housing, industrial and commercial premises for Tanzania’s 48.2 million inhabitants (2012 Population and Housing Census) and for its thriving economy, large-scale real estate developments have been launched in the country.

This is transforming the real estate business into one of the most profitable sectors in the country. The sector has attracted a flood of venture capital dollars and diversified sources of funding, including private equity funds.

To stimulate economic activity and boost the real estate market, the Tanzanian government fostered a very stable and predictable fiscal investment regime, signed several double taxation treaties and multilateral and bilateral agreements, introduced regulations for mortgage financing, established a framework for Real Estate Investment Trusts (REITs), and enacted the Unit Titles Act – also referred to as the Condominium law.

Subsequent to this, the funds inflows catalysed and transformed real estate investment in Tanzania. The real estate market is very vibrant, and a wall of money coming into the sector is driving a huge amount of legal work. Part of that work includes wading through the complex maze of legal rules and regulations associated with property transactions.

It is evident that the real estate sector plays a pivotal role in the Tanzanian economy, as it contributes to employment generation and GDP growth of the country. Almost 10.2 per cent of GDP is contributed by the real estate and business services sector (Financial Stability Report 2013), and in the coming few years, it is anticipated by industry experts to rise by up to 13 per cent.

For banks, too, real estate plays a key role, from a real estate financing perspective: It is estimated that mortgage loans outstanding amount to 156 billion/- with the average mortgage debt size being 62million/- or USD 38,000 (Mortgage Market Update 2013).

This amount is growing rapidly as new entrants come into the market. Moreover, the real estate sector has also been responsible for the development of allied sectors such as steel, paints, cement, bricks, and timber. A recent report by the Bank of Tanzania shows that industry and construction ranks third among the major sectors of the Tanzanian economy in terms of direct and indirect effects.

Being an increasingly capital-intensive industry, the real estate sector is not immune to liquidity crunches resulting mainly from banks’ extremely cautious approach to real estate lending – despite the big improvement in market sentiment in recent years. Isidore Leka Shirima, FK Econo- Consult’s principal consultant, opines: “Banks remain primarily concerned with the level of risk they’ll be taking when they lend to the real estate sector and they are taking an extremely cautious approach.” This approach, he continues, “is reflected in construction- linked payment plans.”

The good news is that alternative investors including private equity funds have stepped in to take big bets on the Tanzanian real estate sector by backing developers with risky shortterm finance, thereby helping the sector to expand.

According to data from the Tanzania Ministry of Lands, Housing & Human Settlements Development, the current housing deficit stands at over 3,000,000 units with an annual growth in demand of 200,000 units. This, coupled with the annual growth in demand for affordable houses and the urban population growth, offers big hyper-growth market opportunities for real estate developers who will design affordable housing options suited to average Tanzanian families whose disposable income is steadily on the rise.

Some of the public pension funds and the National Housing Corporation (NHC) have invested directly in housing. The Parastatal Pension Fund (PPF), for instance, ventured into low cost housing and developed a project in Kiseke, Mwanza, comprising of 580 houses.

The NHC expects to develop a minimum of 15,000 houses for sale and lease, of which 5,000 will be affordable houses for low-income groups by June 2015 (NHC Strategic Plan 2010/11 – 2014/15).

The current scenario has also opened up new locations for residential development such as Kinyerezi, Mtoni Kijichi, Ukonga, Gongo la Mboto, which were otherwise not very attractive to house buyers. Remote suburban areas, where land is relatively inexpensive, are witnessing the launch of real estate projects.

As far as the commercial segment is concerned, with a substantial deficit of office space in the port city of Dar es Salaam, demand for rentals has increased.

Due to the increased scarcity of office space in the city’s central business district (CBD), some residential flats in prime areas of the city have been converted into commercial properties. Although this trend is contrary to regulations, it is a sign of growth in the real estate sector.

The ongoing development of a real estate regulatory and control bill is expected to establish a regulatory agency and streamline the real estate sector by introducing various reforms. This is a crucial step in the right direction. If implemented, the bill should ensure housing for the urban poor by making it compulsory for developers to provide some portion of project townships for the lower income group. The bill should also help streamline the approvals process for all developments so as to reduce or eliminate project delays.

The Capital Markets and Securities Authority (CMSA), the stock market regulator in Tanzania, should step up its nation-wide campaign for sensitising the business community about REITs. This will go a long way to building up awareness and overall confidence and creating an environment conducive for increased private and public REITs, which help to drive the real estate market because developers can sell properties to these funds and use the sale proceeds to fund the building of new projects.

While the government has taken various steps to develop the whole sector, there is a further need to streamline government policies and introduce reforms to boost the real estate sector. Industry experts are advocating a substantial cut in interest rates and greater simplicity in credit financing.

The government should consider removing VAT on building materials to further catalyse and allow for affordability of new real estate developments. These government initiatives will reduce prices further for properties, increase liquidity in the market, and bring down the interest rates to a more realistic level.

In support of the initiatives, developers would lower property prices and more Tanzanians would be interested in buying properties. With a continued strong and stable central government led by President Jakaya Kikwete, the real estate market is expected to get a further boost soon, as improved investment climate sentiment is bringing a lot of confidence into the country. It is against this backdrop that continued growth in the real estate sector is predicted with rising real-estate values and improved credit quality.

Eventually, whether Tanzania’s real estate market can meet the expectations of foreign and domestic investors and developers will depend on the rationality of the regulatory regime and how well the laws are interpreted by courts and tribunals and implemented by the local authorities.

Overall, the real estate market will continue to present more windows of opportunity for those ready to open them.

Report by: Noah Amri , Freelance Property Investment Analyst. 

                   Email: amry.pie@gmail.com  

                   Mobile: +255 783 084 831 , +255 716 828 150

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Tanzania Weekly Market Update for Real Estate Investors

Real estate market is not just highly disintegrated but also experiences different market cycles over time. The current vibrant state of the Tanzanian real estate market needs investors to have well informed specialist based information and hints on how and where to invest. Here comes a piece of a weekly market update.

• ·       Currently investors should target semi-finished houses put on sale by owners in Dar es Salaam and other growing urban areas, because there is high demand for residential houses and office space due to an ever increasing population and many other factors.

• ·       If you are able to find an amazing deal on an old or unfinished house but it is in a good location, weigh your options and see if you can invest in that property to renovate and modernise it and put it back on the market for sale, often flippers can earn double the amount in return.

• ·    Similar profitable investments are found in many urban centres including, Arusha, Mbeya, Mwanza and Zanzibar where a growing middle class population is looking for residential houses and office space.

• ·        I also suggest looking towards long term benefits with investments in areas such as Kigamboni which are developing rapidly.

·    The ninth fastest growing city in the world, Dar es Salaam is experiencing a housing boom and remains one of the most expensive cities in East Africa when it comes to real estate because of demand.

According to Ministry of Lands and Human Settlement, the country’s housing demand increases by an average of 200,000 units per annum with a demand at over 3 million units currently.

“We call upon potential investors to come and join us in addressing this problem of housing which is an opportunity to them,” said Land and Housing Minister, Prof Anna Tibaijuka told a housing investment meeting organised by National Housing Corporation (NHC) recently.

Update by: Noah Amri , Freelance Property Investment Analyst. 

                   Email: amry.pie@gmail.com  

                   Mobile: +255 783 084 831 , +255 716 828 150.

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Real Estate Developers in Tanzania

Bianca Investments
Located on Sokoine Road,
P.O. Box 587, Arusha
Tel: +255 754 788 888

Gimco Africa Property Management Limited
P.O. Box 32822, Dar Es Salaam
Tel: +255 22 213 3037

My Beach
P.O. Box 105 200, Dar Es Salaam
Tel: +255 22 270 1710 / 11

Knight Frank
P.O. Box 9333, Dar Es Salaam
Tel: +255 22 212 7023

Kilimanjaro Golf & Wildlife Estate
P.O. Box 21, Usa River, Arusha
Tel: +255 783 777 025

Estia Property Management
P.O. Box 354, Dar Es Salaam
Tel: +255 22 260 2395

Proin Ltd
Located on plot 14 Old Bagamoyo Road , Dar Es Salaam
Tel: +255 22 270 0345

Whiteknights Real Estate Investment Analysts Company
Located on New Bagamoyo Road Mwenge,
P.O. Box 35480 Dar Es Salaam
Tel: +255 22 277 2150,

Pangani Beach and Golf Resort
P.O. Box 5040, Tanga
Tel: +255 784 200 29

Frontiers property developers and Realtors
Plot 8 & 10 Oysterbay Shopping Center
P. O. Box 23337, Dar es Salaam
Tel: +255 22 2600720

Mutual Developers Limited
located on Ohio Street
P.O. Box 13680
Dar es Salaam, Tanzania
Tel: +255 22 2122767

Sustainable Estate Developers
Located on Jamhuri St. near DTV Roundabout
Tel: 255 786092920

Parasol Real Estate Agent and Developer (Tz) Limited
Located at Red Star Building 2nd
P.O. Box 76950, Dar es Salaam, Tanzania
Tel: +255 225507804

Seven Estate Agency
Located on Bagamoyo Road / Mbezi Beach, Dar-Es-Salaam , Tanzania.
Tel:  +255-713-418-477

ASAS Group of companies
P.O. Box 7215, Dar es salaam
Tel: 255 22 2865967

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Nakumatt takes over Shoprite stores

Kenyan Regional retailer, Nakumatt Holdings, has taken over the running of three stores it recently acquired in Tanzania. The firm said it would over the next one month rebrand the three Shoprite outlets in Dar es Salaam and Arusha. This will bring to four the number of retail outlets that the firm has in Tanzania, currently running a store in Moshi.

The retailer said it would, over this weekend, undertake a clearance sale that would lead to the closure of the three stores for a rebrand and then commence operations as Nakumatt in Tanzania.

“Nakumatt has sealed an assets buyout agreement with Shoprite, and we are undertaking this popular sale to clear current stock holds ahead of a rebrand and reopening of the three stores,” said Atul Shah Managing Director Nakumatt Holdings.

 “Through this sale, we are also evaluating the variety and demand for some of the items to ensure that we optimize the stockholding based on customer demands here in Tanzania.” “At the end of this week,” Shah said, “Nakumatt will be briefly closing down the three stores to facilitate stores refurbishment process.” The process expected to last a month, will thereafter facilitate the reopening of the three stores under the Nakumatt banner and management, which will give an opportunity for all customers to experience the Nakumatt courtesy.

In Tanzania, Nakumatt operates a single store in Moshi, and will be effectively raising its branch network to 49 up from the current 46 across East Africa. Alongside the opening of the three Tanzania stores, Nakumatt with a branch network of 46 stores across the region, is also gearing up for the opening of four other stores in Kenya by the end of the year.

The four stores in Nairobi and Mombasa include Nakumatt Lunga Lunga, in Nairobi’s Industrial Area, Nakumatt Shujaa near Donholm, and Nakumatt NextGen along Mombasa Road. In Mombasa, Nakumatt is also gearing up for the opening of Nakumatt Bamburi as part of the retailer’s regional expansion plans.

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Tanzania Mortgage market grows by almost 50 pct in 2013, say BoT

The mortgage market in Tanzania has been growing steadily with the picking up of the pace of housing investment, the Bank of Tanzania (BoT) has said’

 

In its Tanzania Mortgage Market Updates for December 2013, it said as at December 31, 2013 the total lending by the banking sector for the purposes of residential housing was 156.50bn/-, which was equivalent to USD96.8m, representing an annual growth of 46 percent. 

 

The total number of mortgage loans also grew rapidly, from 1,889 at the beginning of 2013 to 2,784 by end of December 2013, being an increase of 47 percent, it said.

 

The updates attribute the increase in the  favourable interest rate environment during the year as well as awareness on mortgage loans among borrowers, public awareness campaign by major banks and the launch of mortgage loan products by CRDB Bank Plc, Exim Bank and other TMRC member banks that did not such a product as the major contributing factor.

 

 As at the end of December 2013, 19 different banking institutions were offering mortgage loans, with the number expected to increase even further as more lenders continue to launch more products.

 

The mortgage market was dominated by three top lenders, who among themselves command about 67 percent of the mortgage market.

 

Azania Bank, which has the longest presence in the mortgage market, was a market leader commanding 24 percent of market share, closely followed by Stanbic Bank with about 21 percent of the mortgage market share.

 

According to the updates, the market experienced new entrants and there are prospects that large banking institutions such as NBC and NMB will enter the mortgage market as competition in the traditional banking products continue to intensify.

 

Demand for housing and housing loans remains extremely high but is constrained by inadequate supply of affordable housing and high interest rates.

 

The recent rise in the T-Bills rate to 15 percent (those with a maturity of 182 days) will have a negative impact on affordability of all forms of long term debt, including mortgages. Typical interest rates offered by lenders vary between 18 percent and 21 percent.

 

Most lenders offer loans for home purchase but increasingly different products are emerging such as loans for self-construction and for equity withdrawal, which continue to be expensive and beyond the reach of the average Tanzanian.

 

The construction of new houses by the National Housing Corporation (NHC) over the next three years will have a positive effect on the mortgage market as most of these will most likely be priced at affordable levels.

 

Likewise new schemes such as the Civil Servants Housing Scheme which is expected to build 50,000 affordable houses in the next 5 years have the potential to boost the mortgage market even further.

 

Most pensions funds are also actively engaged in advancing mortgage loans to their members, something which will further boost the mortgage market in Tanzania.

The government has also continued to demonstrate its commitment to ensuring the Tanzanian populace has access to affordable housing.

 

 The recent launching of a project for construction of 10,000 houses under the Tanzania Building Agency (TBA) by the Vice President is a clear demonstration of such commitment, and it will boost further growth of the mortgage market.

 

The Tanzania mortgage market as compared to the East African neighbours still has a relatively smaller mortgage market, although it is growing rapidly. 

Mortgage debt outstanding as a proportion of Tanzania’s GDP was equivalent to around 0.36 percent of which is lower than its East African neighbours.

 

Average mortgage debt outstanding as a proportion of GDP for EU countries (which is normally taken as a reference point) is 50 percent.

 

Average loan size as at December 31, 2013 was 62m/- , which is equivalent to USD38,000, the  average loan size for last year compares unfavourably with that of 2012 which was73m/- .

 

The average loan size across mortgage lenders varied greatly, reflecting different strategies and customer bases. 

 

Akiba, EFC and DCB who target lower income customers had much lower average mortgage loan sizes than Stanbic Bank whose average loan size was 300m/- .

 

Currently refinancing and pre-financing mortgages advanced by TMRC to banking institutions is equivalent to 11 percent of total outstanding mortgage debt, the updates show.

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CRDB now offers long-term mortgage loans

CRDB Bank is now offering long-term mortgage loans, bringing new hope to millions of Tanzanians whose dreams of house ownership were dampened by high costs of construction materials. In its recent report, a UK-based Global Property Guide (GPG) -- a research firm that sells data to investors in residential property -- said Tanzanians, yearning for homeownership could realise their dreams if they are ready to pay 134 times their annual incomes.

According to GPG, the buying price per square metre in Dar es Salaam is $700 while one pays an average of $500 on rent each month.

But CRDB believes that problems of how to source long term finances for construction, purchasing and renovation of houses will soon become history, thanks to its new product dubbed ‘Jijenge’.

The bank’s managing director, Dr Charles Kimei, estimates that currently, individuals take up to 10 years to put up a simple family house due to regulations associated with what it takes to get a mortgage.

With Jijenge, the mortgage can be repaid for a period of up to 20 years unlike the bank’s previous mortgage schemes that could only be repaid in a period not exceeding five years.

Jijenge, according to Dr Kimei, attracts an interest rate of 18 per cent plus. One also requires a 1.0 per cent insurance cover for the loan.

“Jijenge’ is designed specifically to give a would-be-builder the peace of mind when it comes to constructing and owning a house. The package also caters for a loan to rehabilitate and renovate a house,” Dr Kimei said in Dar es Salaam yesterday.

Workers, entrepreneurs, farmers and fishermen are all eligible for such loans, noting that the interest will be easily recouped through the appreciation of the value for the house as time goes. According to Dr Kimei, the current demand for homes in the country stands at three million units. The demand is increasing at an average of 200,000 units a year but only 15,000 houses are constructed a year.

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Tanzania Real Estate Sector Report

While the Tanzania real estate sector is not as highly developed as the construction sector, the 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. 

The real estate sector is managed by the Ministry of Lands and Human Settlements Development through the National Housing Corporation (NHC), a parastatal company which is completely government owned and which both develops and maintains a variety of properties. 

The NHC was first established in 1962, but was reorganized and restructured into its present state by an Act of Parliament in 1990. 

The mission of the NHC is to provide and facilitate conditions of high quality housing and other buildings in Tanzania for public, residential or commercial use. 

The primary functions of the NHC include property management, construction of houses for sale, contract business and consultancy services. 

Accordingly, in addition to constructing low and medium cost housing for sale and for rent in urban areas, the NHC is seeking to become a leader in the real estate management and development of the country. 

In October of 2006, the NHC owned 10,790 residential units and 5,231 commercial units. 

In 2006, the total value of these units was estimated to be TZS 172,678,098. 

Of these units, 60% were located in the capital city of Dar es Salaam, which is in line with the increasing demand for housing in the urban areas within Tanzania, and were valued at TZS 168,552,369,379.38. 

Another Tanzania government agency actively involved in the growing Tanzania real estate sector is the Tanzania Building Agency (TBA). 

The Tanzania Building Agency was established in 1997 and was originally placed under the Ministry of Works, but was later reorganized under the Ministry of Infrastructure Development. 

The purpose of the TBA is to provide housing accommodation to the public servants and to build consultancy services to the government and its departments while also employing efficient and effective use of its resources. 

According to Architect Makumba T. Kimweri, Chief Executive of the Tanzania Building Agency, 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, 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 investors want to build apartments,” he says. “They are going to run it, but we have a 25% share of whatever they install there.” 

In addition to the 25% share, Kimweri says that the agency has the option of buying up to 50% of the building within two years. 

The TBA has the largest construction unit for government use and is capable of doing any type of construction work. 

Because the TBA is a government agency and, because land can only be owned by the government, potential investors will be protected from any land concerns. 

Tanzania Real Estate Sector Investment Opportunities
 real estate sector is currently small and underdeveloped, but the developments of construction services as well as increases in population growth have created a demand for real estate and the sector is, therefore, primed for investment.

As Architect Makumba T. Kimweri, Chief Executive of the Tanzania Building Agency 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

“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.

“Our country is still virgin, so there are lots of opportunities, such as those in the housing sector,” he adds, “we need many houses and we need a lot of construction.”

The real estate sector is not only attractive, but also open and welcoming to interested investors, as Architect Kimweri explains, “the first thing for foreign investors should realize is the peaceful atmosphere in Tanzania.”

Currently, the real estate sector appears to be on the verge of joining the construction industry as a prosperous and booming sector, mainly in the larger cities of Dar es Salaam and Arusha, particularly in the development of the office space. 

Dar es Salaam Real Estate Investment Opportunities
Dar es Salaam is Tanzania’s largest city and business capital, with a population of around 2.5 million.

Though Dar es Salaam lost its official status as capital city to Dodoma in 1996, it remains the centre of the permanent central government bureaucracy and continues to serve as the capital for the surrounding Dar es Salaam Region.

Its status as both an administrative and trade centre has put Dar es Salaam in a position to benefit disproportionately from Tanzania's high growth rate in the recent years and is currently the most vibrant city in the Tanzanian real estate market. 

Office Space The leading office space locations in the commercial city of Dar es Salaam have moved from the Central Business District (CBD) to the Gardens Area, east of the CBD.

The move was primarily a result of heavy traffic congestion.
The demand for quality office spaces has steadily increased over the last two years, along with rental values.

There are currently many proposals to build new developments as well as to refurbish old spaces and to convert residential buildings into office space.

The shift in capital cities from Dar es Salaam to Dodoma has created a demand for office space in Dodoma as well, but has not impacted the demand in Dar es Salaam.

According to estimates by Knight Frank LLP, a global development and real estate firm in Tanzania, the current rent prices for office space in prime locations are approximately US$19 per square meter per month with a yield of 12%. 

Retail Space The development of real estate in the retail market in Dar es Salaam is extremely low.

Partially as a result of population growth and increased living standards, the abilities of the sector have not been able to keep up with the demand.

Currently, approximately 80% of retail transactions occur within the informal street trading sector.

However, Tanzania’s first large purpose built retail shopping mall was opened in November 2006 in Mlimani City, located just outside of Dar es Salaam.

The project included a conference center, a shopping mall, a hotel and office parking.

Demands for similar structures are expected to gather speed in the near future.

Knight Frank LLP estimates that the current rent prices for retail space in prime locations are approximately US$12 per square meter per month with a yield of 13.5%. 

Industrial Space There is a limited supply of quality industrial space in Dar es Salaam which, combined with the strong economic growth in Tanzania and in Dar es Salaam, maintains the demand high.

The attractiveness of Dar es Salaam’s industrial space is heightened by the affordable rent prices.

According Knight Frank LLP, the current rent prices for industrial space in prime locations are approximately US$5 per square meter per month with a yield of 15%.

Nyerere Road and Chang’ombe feature the most well established industrial areas. 

Residential Space 
The Dar es Salaam residential real estate market is well established but not very sizable.

The major residential areas are located oceanfront properties.

The supply of quality residential properties is limited and this shortage has helped to keep the prices relatively high in comparison to other African cities.

Knight Frank LLP estimates that the current rent prices for residential space in Dar es Salaam are around US$4,000 per month with a yield of 12%. 

Arusha Real Estate Investment Opportunities

The northern city of Arusha is the capital of the Arusha Region and has a population of about 300,000.

The primary industry of the region is agriculture, with large high-quality coffee and flower production exported to Europe.

Tourism is also at the core of Arusha’s economy, with the city playing host to numerous safari companies, hotels and lodges that cover the surrounding regions that include world famous destinations such as the Serengeti national park and Mount Kilimanjaro.

Furthermore, the city of Arusha has become increasingly important in the region as the headquarter of the East African Community, an intergovernmental organization with plans to form a country called the East African Federation by 2010 with a single President ruling over the current member countries of the EAC, namely Kenya, Tanzania, Uganda, Burundi, and Rwanda.

In addition, the International Criminal Tribunal for Rwanda (ICTR) is also currently being held in Arusha and an assessment of the level of impact that the presence of the ICTR has had on the economy in Arusha has revealed a significant inflow of cash into the local economy, estimated to have been about US$ 60 million between 2002 and 2004.

The real estate sector has greatly benefited from such economic boosts of the recent years, with a constant increase in the number of houses and hotels being built in Arusha and with new plans to develop new housing and shopping areas.

An example of these developments is the recent master development plan of the Kilimanjaro Airports Development Company (KADCO), the first public operated infrastructure to be privatized in Tanzania, and the getaway to the northern zone of the tourism industry in Tanzania.

As Mr. Arnold Kilewo, Chairman of the Kilimanjaro Airports Development Company (KADCO) unveils, “we want to establish around Kilimanjaro International Airport duty free and export processing zones, special economic markets and industries.”

“Also, we want Kilimanjaro to be the centre of horticulture business in Tanzania,” says Mr. Kilewo, “We are going to develop Kilimanjaro international Airport as […] a small self-contained city with attraction to put light industries, duty free zones, hotels, golf courses and conference centres.” 

We are going to develop Kilimanjaro international Airport as […] a small self-contained city with attraction to put light industries, duty free zones, hotels, golf courses and conference centres

Conferences are, indeed, a growing sub-sector in Arusha, with centres such as the well established Arusha International Conference Centre (AICC), which is fully government-owned, but which operates without subsidies from the government as a mature commercial entity.

Arusha International Conference Centre is currently welcoming investors from the fields of equity investment and the procurement of project finance funding, to assist them in the project of developing a proposed four or five star hotel which will be located 3 kilometers from the center of Arusha town. 
Tanzania Real Estate Legal Framework

Land development has become increasingly important in the Tanzania real estate sector as more real estate projects are being developed.

The implementation plan for the Land Act of 1999 was recently completed, to provide for the legal framework in relation to the management and administration of the land and the settlement of disputes.

All of the Tanzanian Ministries as well as the public and private institutions work together in order to ensure the efficient implementation of the national land policy.

Under the 1999 Land Act, all land in Tanzania belongs to the state; however, land can be owned by individuals in three different ways.

The first, is through a government granted right of occupancy.

The second is through the Tanzania Investment Center (TIC) derivative rights.

The third is through sub-leases created from a granted right of occupancy.

Derivative rights and rights of occupancy are granted for both short term and long term periods.

Rights of occupancy are renewable up to 99 years.

Although in Tanzania, land is owned by the government and investors can only lease land for several years, joint-ventures with local counterparts give access to further investment incentives. 

Prospective investors can gather more detailed information directly from the Tanzania Investment Centre (TIC) at www.tic.co.tz

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