Accra’s Biggest Real Estate Project Octagon to Be Fully Finished in 2018, says Dream Realty

Interview with Karim Ibrahim, Managing Director of Dream Realty

What is your evaluation of the real estate sector in Ghana, specifically in Accra? Where is the demand and what are the main trends?

Two years ago, things were good, better than today. Last year, we had an election year in Ghana. As usual, the election passed very peacefully. The problem with every election year is that it drastically slows the economy. In the previous election year, when Mahama took office, he took office from the same party. This time, there was a total change of government because a new party came into power and they have some different visions of how the economy should be dealt with. Therefore, since mid-2016, we have seen a big slowdown in most sectors in Ghana, not only construction. Everybody has very high hopes today that the new government is on the right track in getting the economy back on its feet. Everybody is looking at the end of this year. They are all very hopeful that 2018 will see a big boost in the economy and that people will recover many of the losses they had in 2017 all the way back to mid-2016. So, we have been in a wait and see situation for the past six months, which will continue until the end of the year. In the past three weeks, we have seen some more demand in the real estate sector, but it is more of inquiries coming from abroad. There may be a great deal of funds and money coming from abroad next year. Now is the time where they are coming to see what is on the market, what the prices are, and doing their research. But we all have a good feeling, unless something happens, that by next year, things will start turning around in the country. As for real estate projects, we can also see that there has been a slowdown over the past year. We are supposed to be mid-way into a new project which we decided to postpone until we see actual change on the ground. I would love to do one of the projects we have in the pipeline which is a residential project on the seafront. The Octagon here opened at the end of last year and is doing well. We already have five banks and many small companies. Some people have booked spaces in advance and are planning to start moving in by September or the end of the year, which is quite positive. One third of the serviced apartment block project has been sold, which is a good sign; however, the work to be done inside to finish it has not started yet. This is most likely due to the slowdown as well, and plans and studies still need to be completed.

When will this be finished?

One year from today.

What percentage of the commercial and office space has been allocated and sold?

About two thirds has been allocated. As for the rest, there is serious talk from big companies from abroad. They are still waiting for a green light from somewhere, possibly their investors or their decision makers, to make the move to Ghana.

Would the majority of the occupants be international establishments?

For now, most of the occupants are locals. We have local banks, companies, firms, lawyers, and others. Only two small offices are international companies. So far, it is all local businesses, which I am very proud of and it is quite unexpected. However, their cash flow is lacking because of the slowdown they have experienced over the past year. People are holding on until the economy starts moving again, and once that happens, the locals will start spending more, changing their offices, moving from an old place to a new place, and start opening new companies. As the government here has said from the beginning, they are counting heavily on foreign investment. That is what we are all hoping for in the next year.

I hope by early 2018 we will kickstart our second project which will be residential not commercial, although we have beautiful commercial land. This will be three times the size of Octagon, which is already the biggest project in town.

What are the main obstacles and challenges?

There is no obstacle because I am in a wait and see situation. It is basically waiting for the economy to revive. I am not venturing into a new project. I have examined the new government’s plan. As a foreigner here and as someone who has been here for the past ten years, I believe they are on the right track. They need a good boost from outside, there is no doubt, and I hope they get it. But they seem to know what they are doing. I hope they know what they are doing. With a little bit of luck, they will get there.

You have a different perspective because you are not local, but you are seeing what is happening on the ground. If all goes well with Octagon and your other project is completed, what is your vision for Dream Realty?

Dream Realty is a development company, so our vision is to build more and to have more projects in Ghana. The mother company of Dream Realty is based in Beirut in Lebanon as developers. From 1958 to today, we have built over 150 buildings in Beirut, which is a very tiny city. The idea for coming here was not to build one project and leave, but to do exactly the same thing and eventually have the same legacy of having a large number of projects that we have built and sold. The strategy of the company is to move from one project from another, not to keep them. It is to buy land in very good locations and to develop it and to be able to sell it and move on. We have very nice parcels of land in and around Accra, and my dream is to develop all of them. We are a family company and we are a bit slower than other developers because we like to sit and do the development ourselves. We are our own contractors. So, things take some time because you cannot divide yourself. We save money by doing so and at the same time, we know that the product we are delivering is a good product because we have been on top of it. We are not subcontracting to people and then coming and visiting once in a while. We are here to do this job. My dream for the company is to develop as much as we possibly can. For now, we are holding on for a bit. I hope by early 2018 we will kickstart our second project which will be residential not commercial, although we have beautiful commercial land. This will be three times the size of Octagon, which is already the biggest project in town. It needs to have a very strong economy behind us, which is not the case at the moment. We hope, and we wait, and we will see.

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