NSSF Director, Masha J. Mshomba.
Dar es Salaam. Investors in the real estate sector have gone through challenging times during the past five years - just as it has been for agents.
Uncertainty clouded the sector, forcing some investors to temporarily halt their projects while others had to come up with alternative strategies to stay in business.
It was in apparent response to a fall in demand for its housing units that in January, last year, the National Social Security Fund (NSSF) decided to hand over its 32-apartment buildings to university students to be used as hostels, which was against the plan.
NSSF handed over the hostel premises to the students at its Mtoni Kijichi construction project.
The Dar es Salaam University College of Education (DUCE) took five apartments for its 696 students while the Institute of Finance Management (IFM) took six apartments for its 815 students.
The Dar es Salaam Institute of Technology (DIT) took one apartment for its 144 students while Tanzania Institute of Accountancy took 10 apartments for its 1,165 students.
The Centre for Foreign Relations took one apartment for its 96 students while Mwalimu Nyerere Memorial Academy took nine apartments to accommodate 1,398 students, according to Ambassador Ali Siwa.
Though the issuance of such apartments to students was touted by senior government officials, the fact is that they were just part of massive projects by NSSF that consumed billions of members’ money with a slim chance of being sold due to the economic conditions that prevailed during that period.
The government’s decision to relocate to Dodoma and the Covid-19 pandemic that ravaged the world towards the end of 2019 might have compounded problems on real estate developers like NSSF whose buildings were largely occupied by ministries, departments and agencies in Dar es Salaam.
A recent survey made by The Citizen has revealed that some of the office space accommodation facilities at the Central Business District which had been occupied by wealthy tenants were currently half-full.
A visit to office space accommodation facilities owned by a number of developers, including NSSF and PSSSF were not as full as they used to be a few years ago.
For instance, the NSSF WaterFront Building - which was previously booming due to the presence of a commercial bank branch and offices of the ministry of Industry and Trade – is now empty and its past magnificent view is gradually fading.
“The building needs to be renovated. Its view is getting worse gradually,” said a source who was found at the area, but preferred anonymity.
At the Benjamin Mkapa Towers, which is also owned by NSSF, things were not as bad as they are at the WaterFront.
“The situation is not bad. Some tenants have started returning, for example, a new hotel has already been established here. Customers are slowly coming back, but some prefer other buildings because of prohibitive rent considering that business is not as it used to be a few years ago,” a tenant at the building told The Citizen.
When NSSF contacted them, they said they were in the process of renovating the WaterFront building. But they were not ready to reveal what the current situation was and how much the renovation would cost.
A tenant in the Benjamin Mkapa building who did not want to be named and his company said the rental costs have remained to be high, but they decided to stay despite the presence of new buildings, which offer reasonable prices.
“You know the business situation at the moment is not good. There are issues with Covid-19 and people moving to Dodoma. Also at the moment, there are many new buildings and modern ones that do not have tenants and their prices are reasonable, but unfortunately here they have decided to stick with their high rents,” he said.
The new NSSF director general, Mr Masha Mushomba told The Citizen’s sister paper Mwananchi recently that the fund was working out a plan that would see it complete all its projects in a deliberate bid to ensure that it (the fund) reaps the benefits that are associated with the investment.
He said there were projects that the fund would complete on its own as those that it will have to seek partners.
Some will have to be sold entirely but in a manner that takes into account the interests of the fund’s members.
“Our aim is to complete all the existing projects, mostly those that had not been completed for a long time. There are those that we will complete on our own and those that we will have to sit down with others who may wish to take them through striking agreements with us,” he said.
He said NSSF was open to people who are interested in investing in its projects at Dege, Dungu, Toangoma and Kijichi to come forward and contact the fund for deliberation.
Its utmost aim, as outlined by the sixth phase administration of President Samia Suluhu Hassan, was to do away with all projects that turn to be white elephants.
“In the shortest possible period, the issue of poorly performing NSSF projects will become a thing of the past…We will put all our energy on projects that effectively contribute to the NSSF’s economic wellbeing and security of members’ funds,” he said, noting that its poorly performing real estate projects will soon pay off. As an institutional investor, NSSF’s focus will be investing much of its members’ funds in government securities and in buying shares in profitable companies.
This, he said, was encouraged by improvements in yields on the risk-free Treasury Bonds that currently stand at around 15 percent.
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