DRC: Has the land of the Grand Hotel in Kinshasa been sold at a good price?

Text by: Sonia Rolley Follow

It is a transaction that has aroused much comment in business circles in the Democratic Republic of the Congo: the sale of the land known as the parking lot of the Grand Hotel in Kinshasa, which is half owned by the Congolese state. This land of more than 22,000 m2 was put on sale for the first time in 2014. It was finally sold a few weeks ago to Modern Construction, the company of the Indian businessman Harish Jagtani originally more than twenty luxury real estate projects in the capital. Over 22,000 square meters for $ 18 million, a very good deal for land among the best located in Kinshasa. How does the company of the Grands Hôtels du Congo explain such a low price?

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For an administrator of the Grands Hôtels du Congo, this price is the best that the Congolese State and its private partner African Equities (financial holding company based in Luxembourg led by the Belgian businessman Philippe de Moerloose, Editor's note). We are talking about 22,124 square meters recorded in the cadastre in March 2020. The fenced space measures a little more on satellite photos of April 2019 (22,352 m2), according to the calculation of RFI. So 18 million is just over $ 800 per square meter when the land is supposed to sell for well over $ 1,000 at La Gombe.

For this administrator, it is for lack of buyers yet "  actively sought  " for six years for all or part of the land at market prices, despite the boom in luxury real estate in the capital. He presents a brochure which is said to have been distributed "  in 150 copies and up to international organizations such as the World Bank and UNICEF  ". This brochure speaks to an area of ​​22,452.82 m2.

In the business and political circles in Kinshasa, we remember only one real call for tenders. It was in 2014. Up to ten plots were offered on this land. And there is also talk of a political deadlock that would ultimately prevent their sale. Five years later, in any case, no blockage and a buyer: the Indian businessman Harish Jagtani and his company Modern Construction represented by the firm of Alexis Thambwe Mwamba. The President of the Senate has always refused to comment on the information.

The State, which has a say as a shareholder, has given its agreement. According to a document obtained by RFI, the Minister of the Portfolio, from the pro-Kabila coalition, gave his agreement on December 20, 2019 to the sale of this land at this price for, he specifies in his correspondence, to finance the renovation of one of the two buildings of the Grand Hôtel de Kinshasa. This document does not specify the name of the beneficiary of the transaction or the procedure used for the sale, with or without invitation to tender. Minister Clément Kwete mentions the establishment of a joint commission "  to assess previous investments and their profitability  ". We do not know the results of this committee's work, but the administrator of the Grands Hôtels confirms this audit. RFI tried to question the Minister on the price paid by the plot, but he did not follow up on our questions.

Partnership with the Accor group

Behind the sale of this land, there is a need to fulfill the clauses of the partnership signed in 2014 with the Accor group and its Pullman brand. The Grands Hôtels company had to renovate the two buildings in Kinshasa to bring them up to Pullman brand standards and it is expensive. The first building had been partially paid by already mortgaging this land. So from the sale of this exceptional property, the Grands Hôtels will ultimately only draw 7 million. The company had to repay a loan of 11.5 million of the 28 that officially cost the renovation project of the first building carried out by one of the leaders of the sector, the Italian company Consonni.

But for the second, which still has more rooms and a shopping mall, the management of the large hotels ensures that it can carry out the renovation thanks to a loan from the Industry Promotion Fund, with the same quality and for only 12 million, almost two times less than the estimated price in 2014. Again, this statement is surprising in business circles. The Consonni company estimated it at the time at 18 to 24 million dollars, but it depends of course on the specifications. But for the administrator of the Grands Hôtels, it would be because the prices at the time had been “  overvalued  ”.

As for Harish Jagtani, when asked about the conditions of sale of this land, he assured RFI a few weeks ago that he would use it to open a Covid-19 patient center and promised that 'it would be completely free.

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