Oromia International Bank (OIB) gave the highest offer for an auction to buy condominium shops under the middle-income housing scheme.

The shops at the sites of Senga Tera and Crown, the latter of which is in Aqaqi-Qality district, got the highest offer of 171,000 Br and 115,000 Br a square metre, respectively while the Addis Ababa Saving Houses Development Enterprise (AASHDE) set a floor price of 19,364.30 Br a square metre.

“There is a difference of around 10,000 Br with that of the shops at the lower-middle income housing units,” said Abraham Tesfaye, chairperson of the Enterprise’s tender committee.

The bid for the sale of the shops was floated in early February, while the financial opening was carried out in late March.

The number of shops made available for the bidders was 305, with 206 of them located at Crown site. Fifteen shops are reserved for the Commercial Bank of Ethiopia (CBE), according to its agreement with the Enterprise to match the highest offer once auctions are made.

Over 4,000 bid documents were sold with only 858 bidders submitting their bid documents. And over 700 of them were for the Senga Tera site’s shops.

The floor area of the shops ranges between 396sqm and 70sqm. This means that the decade-old OIB, which has 199 branches in the country, half of them in the capital, will be set back at least eight million Br.

OIB registered a profit of 290 million Br, having grown by 17pc, while its dividends declined by 32 Br to 310 Br in the past fiscal year.

These two sites with 1,292 houses were inaugurated a year ago by the outgoing Prime Minister, Hailemariam Desalegn. Close to a thousand of them were transferred by the Addis Abeba Housing Development & Administration Agency to owners last July.

The Senga Tera site has five blocks and 410 houses, of which 110 are planned for commercial activities. The Crown site has 14 blocks and 883 houses under it, of which 210 of them are designated for commercial purposes.

Banks have become known for their brick-and-mortar investments, some of them at high prices. Two years ago, Nib International Bank offered 101,111 Br for a square metre of land at the Lideta Meliso Malmat site – the highest at the time for the Addis Abeba Housing Agency.

“Increasing branch network will benefit the bank’s saving mobilisation efforts by bringing the bank closer to customers,” said Sewale Abate (PhD), an assistant professor at Addis Abeba University (AAU), who has also worked at the Development Bank of Ethiopia (DBE) as a branch manager.

Abe Sano, president of OIB, declined to comment on the auction.

Source: AddisFortune