Thursday, February 8, 2018

Developer builds 800 housing units

The Watumishi Housing Company board has adopted

The Watumishi Housing Company board has adopted a hybrid strategy to minimise construction costs. PHOTO|FILE 

By Rosemary Mirondo @mwaikama

Dar es Salaam. Watumishi Housing Company (WHC) has constructed more than 800 units since it was set up in 2013.

The housing units are for public and private employers as well as pensioners.

WHC chief executive officer Fred Msemwa told BusinessWeek that when work started in 2014 the target was to construct 50,000 houses in five phases in Singida, Mtwara, Tanga, Mwanza, Shinyanga, Morogoro, Dodoma, Dar es Salaam (Kigamboni).

“After acquiring land we did research to know how many houses were needed at that particular time and discovered that the demand was high in Morogoro, Mwanza and Dar es Salaam.”

The WHC board adopted a hybrid strategy of using the force account and contractors to minimise costs and build more houses.

So far the company has constructed houses at Mkundi in Morogoro, Kisesa in Mwanza, Bunju B in Dar es Salaam, Magomeni (Dar) and Kigamboni.Its 88 units at Magomeni have been sold. Some of 75 units at Bunju and some of 326 units in Kigamboni have been purchased.

WHC is putting the finishing touches at 60 units in Mwanza while 75 per cent of units in Morogoro have been sold.

“We have at least 800 units where 180 units were financed by the government through TEA for teachers in remote areas. They include those for Mihambwe Secondary School in Tandahimba, Kiangara in Liwale, Mikangaula and Likokona in Nanyumbu. Other secondary schools include Kandawale in Kilwa, Mjawa in Kibiti, Msata in Coast Region, Luegu in Namtumbo, Uleling’ombe in Kilosa, Isanzu in Singida and several other schools.”

At least 240 units located in various parts of the country have been sold.

As a real estate investment trust (REIT), WHC-REIT started by selling shares or units at Sh250. The value has increased to Sh300.

It plans to build 500 houses in two phases at Njedengwa in Dodoma.

“The first phase includes constructing 159 houses where more than 40 houses are pre-paid,” Dr Msemwa said.

WHC has received a grant from the government to procure a studio and state-of-the art survey equipment worth Sh1.5 billion.

According to him, that will enable WHC to build houses for sale and survey plots.

WHC will start selling surveyed plots in Arusha in cooperation the municipal council, before proceeding to Dodoma and Kigamboni.

Challenges facing projects

Challenges facing the company include failure of some customers to purchase houses due to low salaries.

“Interest rates offered by banks are very high -- to the tune of 15-20 per cent,” he said.

He cites another challenge as high VAT at the rate of 18 per cent on construction materials as well as purchase of housing units, prohibiting the majority of employees from buying them.

The construction of houses in areas that are hard to reach is another challenge. Some schools are located in areas where vehicles cannot reach. WHC was forced to use camels or ships to transport building materials, increasing construction costs.

“That was not the only challenge as some of the areas lacked electronic fiscal devices and the purchase of construction materials became difficult.”