Devtraco to build 7,000 affordable housing units to reduce escalating deficit
ISO certified estate developer, Devtraco Limited, says plans are afoot to begin the construction of 7,000 affordable units within the next 12 months to ease Ghana’s housing burden.
“We are debating the land as we speak and we are already doing the calculations of our cost, etc. and regarding this we have engaged with a Singaporean company which will provide us a new technology which is faster to build and a lot cheaper development cost. If everything turns out right, in the next year we will surprise Accra with a very large development with truly and real affordable housing,” the Devtraco Group Sales and Marketing Director, Mr Jorge Osόrio, told the Daily Graphic in an interview last Friday.
Devtraco has been in the real estate business for 25 years, during which it has mostly developed housing for the middle and upper classes of society. Currently, it boasts the largest gated community in Ghana that comprises 1,300 housing units, which is Devtraco Courts at Community 25 in Tema.
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Many of the plush apartments makes provision for children as well
Speaking to the plans the company had in terms of housing for the lower class, Mr Osόrio said: “It is true that Ghana and the great majority of the African countries are missing the lower segment of the market and we are on that. We have a project of affordable housing where we will develop 7,000 homes at really affordable prices.”
He, however, stated that as the plans were at the teething stages, little could be said about the actual cost of those affordable dwellings and how they could be procured, as well as where they would be sited.
Nonetheless, he reiterated: “We do care about the segment of the market and actually the 1.7 million deficit is not accurate anymore. Internally, we would guess that it is way over two million – the real housing deficit and this is the segment that we are considering to go to very soon by constructing affordable housing for 7,000 new persons.”
Progressive challenge
Estates are usually well laid out with tarred streets
Adding his voice to the debate on the affordability of housing to especially the lower and middle income earners, the Sales Manager of Devtraco Plus, Mr Eugene Birikorang, described it as a progressive challenge, saying it was a matter of time for the necessary actions needed to be taken to address the issue.
He argued that the difference between the cost incurred by an individual in putting up a building in a less developed area plus the added costs of non-existent utilities, including road infrastructure, security, distance and other inputs needed to allow enjoyable habitation and acquiring a property at a well-laid out community with all the needed infrastructure and appealing environment was almost negligible or non-existent if considered carefully.
“These three things have to be attacked. The price of the housing, the cost of the housing, and then my earnings. If these three come together at an equilibrium point, you will see a lot more uptake,” he said.
Devtraco Group
Although it started off just as an estate developer, Devtraco Limited has now evolved into a group with five additional wings.
Devtraco Plus, which it established eight years ago, is intended to go to the plus side of the market as affordable luxury. Seven developments have already been constructed in the past seven years with the recent one, Nova, sited at Roman Ridge in Accra.
A construction company, Fabrico, has also been created in the group on purpose to build faster with the expertise of the construction company but dependent on the developer.
“We are putting together the best of two worlds,” the Group Sales and Marketing Director, Mr Osόrio, said.
Property management company, Talis Property Services, has also been added, which arranges the tenants of the Devtraco Group for the clients who are often investors.
“It is important because the great majority of our clients are investors – they buy to earn money with tenants and they buy to earn money with the capital appreciation of their properties,” Mr Osόrio stated.
He indicated that Talis also provided committed turnkey services such as seeing to management of the properties, maintenance and fixing any challenges of the tenants on behalf of their clients.
“Pan African Homes, another company in the group, is going to provide 5,000 homes in Liberia so we are already internationalising the Devtraco Group,” he disclosed.
According to Mr Osόrio, the group had also created a hotel company known as Devtraco Hospitality, which will oversee several hotels, two of which will start building in January 2019 and be fully operational 24 months later.
The living room in one of Devtraco's apartments
The first hotel in partnership with an international brand will be built at Roman Ridge in Accra on the site where the company already has residential developments – Nova.
Mr Osόrio said the hotel would attract people for both long and short stays from one night to six months or over, and would comprise 161 serviced apartments.
“Construction will start with studios and two bedrooms but there may also be three bedrooms, while some of the apartments would be combined,” he said.
He divulged that the second hotel - a five or at least an upper four-star hotel with a very known brand would comprise 200 apartments and be put up at East Cantonments in Accra.
“It is going to be a game changer in Accra because of the structure of the building, with a design like a sail,” he said.
Challenges
He enumerated some challenges which he nonetheless said he believed would slowly change, such as land ownership and acquisition.
“This challenge is huge because although we have the experience many times new people come knocking on our doors saying I own the land. The other problem is that construction takes a lot of time and majority of the materials used have to be imported, therefore, there are challenges with logistics, with the materials sometimes remaining longer than they should at the ports. There are also related taxes and unaccounted expenses that have to be faced. If this process should be smoother and faster, I am sure that the construction materials will become cheaper as well and we could improve on the quality because we will have them just in time so we could choose the right quality and now we are limited to certain suppliers and uncertainties regarding logistics,” he stated and added that another challenge was the cost of mortgages.
“A person would have to normally pay 25 per cent of interest on the principal money that they acquire, which is a lot, although the trend we see on the market is that this will decrease. Nevertheless, it is too expensive,” he said.
Change
Mr Osόrio said the company had decided to change its positioning to go big and find alternative markets despite the challenges it had experienced during its 25 years of existence.
Apart from delving into the hotel space, the Devtraco Group is also going to develop office spaces, commercial centres (retail which will house high end brands in terms of fashion).
“So we are also innovating in the field of real estate; not only having hotels and apartments but actually having something in between – an apartment where you can have your privacy and can also cook your own food because you have a kitchen and also invite your friends over but with services from the hotel,” he said.
Awards
Mr Jeorge Osόrio
The Devtraco Group has won several awards including the Dubai, Africa & Arabia Property Awards 2018/2019;
Best Apartment – Ghana (NoVA), Dubai, Africa & Arabia Property Awards 2018/2019; Best Mixed-Use Development – Ghana (NoVA) and the Dubai, Africa & Arabia Property Awards 2018/2019; Best Mixed-Use Architecture – Ghana (NoVA).
Some others are the Dubai, Africa & Arabia Property Awards 2018/2019: Best Mixed-Use Architecture – Ghana (NoVA) – award for five-star entry and the Real Estate Developers’ Awards 2018, Residential Developer of the Year.