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Undoubtedly Addis Ababa is one of the major diplomatic centers in the world. It is home to the African Union, the United Nations Economic Commission for Africa, many regional UN agencies, several embassies and diplomatic missions. Addis has also been a preferred host city to great number of international NGOs and many have their regional head quarters based in the city. The recent announcement made by the United Nations, in which it revealed its plan to make Addis Ababa its third largest global hub after New York and Geneva will cement its status as one of the most important diplomatic cities in the world for many years to come.

Furthermore, international companies and entrepreneurs are flocking to the city in big numbers. In the last decade or so investors from countries like China, India and Turkey have been investing in the country big time mostly in the manufacturing sector. The Chinese have especially been big players in the infrastructure development in the country ranging from building roads, railways, industrial parks, and telecom expansion works besides being key players in the manufacturing sector. Companies from North America and Europe are also slowly beginning to realize the huge investment potentials in the country and are following suit. Big multinational companies such as Unilever, Diageo, Heineken, Nestle, Reykjavik Geothermal (backed by US investors) and General Electric are just few western companies that have already come into the country in recent years.

As a result, there is a big demand for good quality accommodation for the ever increasing expatriate community in the city and the demand will only increase in the years to come. The million dollar question here is that “Is Addis Ababa ready to provide its foreign guests with quality housing that meets their expectations and desires? This article shades some light on this important issue.

Before answering this question, let me describe the needs and wants of expatriates when it comes to housing. What my nearly 10 year experience working as a real estate professional and relocation specialist in the trenches of Addis Ababa thought me is that most expatriates want at least a well maintained and well lit house with a good size matured garden situated in “safe and orderly” neighborhood with easy access to their work place and basic service providers. Interestingly, even those who have lived in apartments their whole lives prefer houses to apartments when they move to Addis Ababa. Neighborhoods such as Bole, Old Airport, Aware, Cazanchis/Inderase, Megenagna, Hayahulet, Kebena, Sholla/British Embassy area, Addis Gebeya, Sidst Kilo, Piasa, Arat Kilo, Ferensay Legasion, and Tor Hailoch have been the most preferred expat sanctuaries for decades. In recent years Jack Ross, Ayat, Sunshine Meri Luke, Sunrise, Varnero, Ropack, and CCD residental villages have somewhat helped expand the housing option available to expatriates in recent years.

Chances are most of the neighborhoods in the first group will no longer have the kind of houses most expatriates want in few years time. The reason is that The Addis Ababa City Master Plan calls for aggressive “city renewal”, which means a lot of houses will be demolished to make way for high rises such as hotels, office complexes, shopping malls, apartments and state-owned office buildings. The second group is already facing a challenge of a different kind – heavy traffic. With the exception of Jack Ross to a certain extent, these villages are losing their popularity due to the rush hour traffic jam, which has become unbearable in the last few years and it is likely to get worse before it gets better. This will leave a typical expat with very little housing options. Their last choice might be living in apartments but that also poses another kind of problem. The quality of many of these apartments is quite poor and they don’t offer even the most basic amenities in acceptable standards.

Therefore, the answer to our million dollar question has become so obvious that even my third grade kid can answer it – Addis is not ready to provide quality housing to its fast growing expatriate community.

Free advice to smart real estate developers/investors

Build 3 to 4 bedroom houses near the city center that have modern design, great finishing, airy and good size garden, where the master plan does not prohibit such projects. These days, everyone building houses near the city centre seems caught up in unhealthy competition of owning a grander mansion than his immediate neighbors and his peers. Owners of such houses have been racking in huge sums in rental income as result of the demand for big houses by institutional tenants. However, this is not likely to continue due to two reasons. Firstly, a lot of embassies who are typical renters of such houses have built or are building their own properties. Secondly, such massive houses have continued to be built in big numbers and will be fighting over the continuously shrinking pool of prospective tenants.

2. Build great apartment with world class amenities in the city centre. Many people are building apartments in the city centre but most are below international standards. If you want to build apartments, make sure you don’t just build ugly and suffocating cubicles. Besides building spacious and beautiful units with superior finishing, think about having ample outdoor space with garden, community pool, terraces and balconies. Having gym, spa and basic service centers will further enhance the desirability of your investment.

The writer, Dereje Mengistu is a seasoned real estate professional and relocation specialist based in Addis Ababa, who has been helping expatriates and international companies find residential and commercial properties for rent for nearly a decade. He is also one of the owners of Ethiopianproperties.com, a leading property portal for all types of Ethiopian properties.