As cities continue to expand with a burst of population, the demand of housing continues to remain a much needed necessity. Addis Ababa, is a city of rich culture and an even richer composition of people stretching from its local citizens to diplomats and a huge expat community. One firm across the pond from Africa seeking to house the diverse population is Rockstone Real Estate, a premier German developer. Spearheaded by its CEO, Dietrich E. Rogge, the firm since incorporation has successfully developed and delivered €250m worth of real estate projects and currently has a project pipeline of € 400m under management. The firm’s project ‘Kefita’, is set to be the first Ethiopian residential building in the process of obtaining the green building certification, EDGE. Capital sat down with the firm’s CEO for an in depth insight. Excerpts;
Capital: Tell us about yourself, your firm and what is it that you exactly do?
Dietrich E.Rogge: Thank you so much for having me in this bright and sunny morning at Hilton hotel. It is an honor and a pleasure to be back in Addis 10 months because of COVID and I am excited to be back. I am the CEO and founder of Rockstone real estate which is a German based real estate developer. Next to our offices in Germany we have other offices in other European countries such as Spain and Portugal. Ethiopia is our first office in Africa and we are very proud to embark in our first project, “Kefita.”
Rockstone is a company that I founded seven years ago in Germany. We are a real estate developer company that does residential projects and offices. We usually complete them and then sale them to other investors and that is what we have been doing to the medium and high end segments and that is how we have gained our expertise. We have also ventured out to the hospitality sector with our projects in Spain and Portugal. More or less three or four years ago, the idea came to professionally embark to the Africa continent. This came about after a conversation I had with a good friend of mine who resides in Kenya who is experienced and has expert understanding of East Africa. He told me if you truly want to embark in a great adventure and a great experience in Africa, you should go to Ethiopia and I came here four years ago and it was kind of love at first sight for many reasons. Amongst the great reasons was the richness of the culture, the vast opportunities that are here in Addis and the wonderful climate you have and a combination of local authenticity and big international expat community. Lastly, the best African airline, Ethiopian Airlines which makes it easy for me to connect from Addis to Germany is what attracted and brought us here.
Capital: How have you found the regulatory system in Ethiopia in relation to the Real Estate Sector?
Dietrich E. Rogge: From my own personal experience I found it to be supportive. Being a foreign investor coming in from Germany to Ethiopia, obviously one can expect it to be a difficult environment or an unknown environment but I have to tell you that I found all levels of municipality in government from buying the land to registering the deed, into applying for the building permit and getting the permit, even setting up our company and receiving our business license, we have had a smooth good experience. I do however know that there might be others with different experiences but I do have to acknowledge that our experience of getting things done were very good. This might also probably be attributed to our partnering with the very strong local partners together with the wonderful team to make sure that we deliver our project on time and on quality. This will enable us to make sure that we are here for the long term and not for just a one-off project.
Capital: Who are your local partners?
Dietrich E. Rogge: For us being German developer and not having experience here, teams and partnerships were essential for us. It is very wise in our end to understand the local issues of culture, network and people because we do not want to impose our experience in every place we go. We want to transfer some knowledge and some know-how so as to make sense where you think there are issues to be addressed. We really also want to understand the authenticity, the culture and the question of ‘What do people really want’ and try to put everything together, to which we believe is key. ‘Kefita’ hopefully shows that because it has a very authentic identity because neither is it a German product nor a foreign thing in Addis but rather it is something that we keenly thought about in great detail. And to that effect as Rockstone we have partnered with a very well-known and respected local Architecture and Engineering design company called Bigar. Bigar together with the American private equity company, Cerberus are our joint venture partners. Rockstone being the developer is working in conjunction with these firms in the realization of this project. Kefita is truly an international-standard building to be proud of.
Capital: ‘Kefita’ is an Amharic word, what was the thought process in the naming of the development? What are the features and capacity of the development?
Dietrich E. Rogge: ‘Reach new heights’ is sort of where everything comes from. First of all why we chose an Amharic word is to stay true, to be authentic. For us authenticity stems from merging the local culture and traditions with European best practices, best in class building. The architecture also shows this. Authenticity also comes from the name that is why we embarked on looking for an Amharic word that could easily be spelt out and that’s how we landed on the name. The name itself sounded wonderful in compliments with our brand of reaching new heights. In signal, a large building going to new heights close to the mountains, is what we are going to embody.
In terms of features, in its core the development is a residential project in that it is an apartment. The development is set in such a way that blends the culture and tradition of Ethiopians as well as the expats that exist within the country. The development seeks to create a thriving community of diverse people who will share living spaces within the development. We are looking at a space here at ,Kefita, where Ethiopians can buy the property to live or rent to their fellow Ethiopians or expats or Diplomats or NGOs and others, thereby creating an urban or modern community lifestyle. Part of this experience therefore requires top notch services similar to that of hotels. Therefore we have provided four floors for parking, because parking and traffic is a hectic issue to not only here but also across the world. We also have hotel amenities floor where people can all meet and have a great view of the city. We also have sport facilities, bars, function room, even a kindergarten. The development has one hundred exclusive apartments built exacting international standards ranging from one bedroom to penthouses on the top floor. Living starts on the fourth floor above the Kefita floor with hotel-like amenities, elevating every apartment above the tree tops.
Capital: There are two things in the Real Estate sector that have been of huge issue. One is time of project delivery whilst the other is poor quality. How are your preparations on this front?
Dietrich E. Rogge: Ethiopia is obviously an early stage market in terms of how it regulates different businesses and industries and real estate is part of it. I understand that there are past experiences in the real estate market here in Addis which were not based in fulfilling the trust that people had put in them in terms of certain projects. Is that only special in Ethiopia? Well of course the answer is no. From my experience this is something that happens pretty much all over the world. If there isn’t a certain regulations in place, or the right trusted partners in place in terms of delivering projects there exists a window of trust and promise being reneged on. Real Estate on one side is getting better regulations in Ethiopia as well as from my country , Germany and as developers and sellers on our side, we are doing all it takes to build that strong bond of trust between us and our clients. We achieve this trust since: We are a fully funded project not depending on pre-sales for funding because we are financed by debt and equity. In the past people bought the land, then they sale in order to get funds to build, and that is not the case for us. Furthermore, we try to foresee future trust issues in terms of future buyers, thus we develop a fair contract for the buyers. The contract has various promises in it that we cannot renege on that are clearly highlighted within the contract. So this is how we are building trust in Ethiopia for our brand, Rockstone Ethiopia, by showing that we are a strong capable developer that delivers on time and quality. A testimony of our quality is from the previous projects that we have done and with the strong local partnership that we have built. Because our partners also have a strong track record of timely delivery and highly quality it is a true reflection of our work as we aspire to be the best in the market.
Capital: What is the estimated price per square meter of the development?
Dietrich E. Rogge: It is comparable to other developments in Addis. We have made a clear market analysis on similar building in the market and there are other projects that are close, such as the one close to the Hyatt Regency ,for example, La Gare- which is a key project currently growing up. These are reference of class A products that we are looking at and we are pricing ourselves also in that higher segment but not anywhere above it. So we are pricing ourselves within a comparable market segment.
Capital: Currently, you only have one title deed, are you planning on adding more?
Dietrich E. Rogge: Absolutely yes. Since we now have developed this project, over the period of one year as we continue to finalize the underground construction and the above construction begins we are looking into investing in other projects next year. Therefore we will buy one or two plots to develop new project in the near future.
Capital: Do you have plans of getting into the construction sector besides the real estate sector?
Dietrich E. Rogge: Currently, we are not planning to join the construction sector. However we want to work in conjunction with Class A construction companies but we do not plan on becoming a construction company ourselves. That may change over time and may depend, for example, if we see a good opportunity to become a construction company after two or three projects we might look into it. However, Rockstone in its core is a real estate developer firm and our primary focus still remains so.
Capital: Where do you source the construction materials?
Dietrich E. Rogge: Due to the foreign currency shortages and due to the need of importing a lot because it is not mostly manufactured in Ethiopia to get the buildings done, we tend to import from outside. But in order also to maintain the authenticity we look into materials that we can source locally so as to also have a homemade touch. Therefore we have a constant struggle that we need to import many goods and services but we also want to minimize the degree of importing because we want to maintain authenticity.
Our human resource here is built by capable Ethiopians who are passionate about their work as well development within the city. Our firm here is called Rockstone Ethiopia so as to maintain authenticity and be local because real estate in retrospect is a localized thing. We have a growing team here at Rockstones and we have also partnered with Bigar to strengthen local capacity and to exchange know-how and expertise.
