Real estate business

TRC enters the real estate sector to improve its sources of income

Masanja Kadogosa, managing director of the Tanzania Railway Corporation (TRC), told the Guardian newspaper in an interview with the Guardian newspaper that the global experience in operating rail transport has shown that 40% of revenue comes from real estate .

He said TRC has designed its stations to take advantage of major sources of revenue to help train operations.

“Stations, which are assets not for sale, but from which income can be derived through the rental of commercial space,” he said.

Available data shows that the Tanzanian real estate sector contributed 3.1% to the country’s real GDP with $1.5 billion in 2019, compared to $1.2 billion in 2015, an increase of 25%.

“As we prepare for the launch of the operation, we are focusing on real estate investment, which is why all stations are designed for business,” he added.

He said that at the “Tanzanite” station in Dar es Salaam, there are spaces for rent to invest in banks, hotels, shops, supermarkets, pharmacies and other related services.

Kadogosa said the countries running the SGR have proven to us that investment in real estate is vital to further increase income, adding that it can be used to generate income and be the subject of an urban project. or neighborhood.

In Japan and Hong Kong, and increasingly in London, real estate is an integral part of the development of the transport network.

The potential for more productive use of railway land has existed for years and reselling it is not necessarily the best option,” said a Financial Times expert.

However, many still believe that the railways should not get involved in real estate business. A mistake!

However, it is well known that the railway is an industrial sector that offers little return

Real estate is the key, always crucial, to the financial sustainability of Japanese railways that Europe does not know. Each line departing, for example, from a city like Tokyo, serves a particular section of the suburbs.

Unlike European cities, these suburbs compete with each other and the rivalry is fierce.

Originally, building shops and apartments was a way to get people to use the line,” Yoichi Takahashi, head of transport planning at Odakyu Electric Railway, told the Financial Times.

For the Japanese railways, this competition between suburban areas is therefore strongly linked to the quality of the railways… and their real estate!

In Switzerland, the Schweizerischen Bundesbahnen (SBB), plans to build 10,000 long-term homes, a third of which will be rented at low rent (20% below market price).

These apartments will be built on around thirty plots of land and will in most cases remain the property of SBB, which can then resell them “at market price”, thus realizing a nice added value.

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