SPF opens micro complex building at Ile Du Port |28 May 2022
The Seychelles Pension Fund (SPF) has officially opened a micro enterprise project as part of its long-term strategy to sustain the pension scheme.
The ‘Dreamgate Complex’ for small and medium-sized enterprises (SMEs) and offices, was inaugurated yesterday morning at Ile Du Port by President Wavel Ramkalawan.
Among guests present were Vice-President Ahmed Afif; the Minister for Finance, National Planning and Trade, Naadir Hassan; the chairman of the SPF board of trustees, Marc Houareau; the SPF chief executive, Nisreen Abdul Majid; staff and members of the board of trustees.
The ‘Dreamgate Complex’ situated opposite the Seychelles Petroleum (Seypec) North Petrol Station, comprises shops, workshops, offices and warehouses in two separated blocks of ground and two storeys. It is yet another addition to a wide array of investments undertaken by SPF totalling 23 real estate projects within the organisation’s extensive investment portfolio. The complex, which started in February 2019 and ended in December 2021, was constructed by WellPoint Development at a cost of R125 million. It has provided 10,215 m² of additional business space into Victoria.
In his address, Mr Houareau said the new investment is yet another milestone in the short history of SPF taking into account that since inception, the fund has invested heavily in the real estate (residential and commercial) for its portfolio.
Mr Houareau noted that as of today, the SPF’s real estate portfolio is too high (at 50%), but at time they are looking from shifting real estate in the residential area to commercial as the case of the ‘Dreamgate Complex’. The idea for the project started back in 2015 when SPF was approached by government with a proposal to pioneer a micro enterprise building to create affordable space for SMEs to grow in the vicinity of Victoria as the Providence Industrial Estate was congested.
“I think it is worth noting that the original budget for this project was R157 million and through excellent project management we manage to finish the project at R125 million. This is a significant R32 million windfall for the pension fund and what’s important is that for every million we save, we can use obviously for other projects,” said Mr Houareau, who thanked everyone involved in reducing the construction price which in line with SPF’s policy requirements, it is expected that the project will earn a rate of return of 13%, which in turn would shorten the period to recoup the invested capital to 8 years.
In relation to difficult decision that SPF has taken with regard to retirement age and increase in pension contribution which have led to criticism, Mr Houareau assured its members that the project was a prudent investment that will bring dividends for decades to come.
He added that the investment was purely to sustain the pension fund and that if we not invest, especially in properly and wisely manner, the fund will only last for 12 years and in the event of bankruptcy, SPF will have to sell its assets to pay pensioners.
Mr Houareau noted that now that the complex has attracted a lot of tenants (67%) and with more companies showing interest to move in, the move is to reach 100% capacity in the next few months which brings more value to the fund.
Before leading President Ramkalawan and guests on a tour of the complex, Mr Houareau thanked all those who have been involved in one way or another in the realisation of the project and the members for walking the journey alongside.
Mr Houareau later explained that the reason for SPF to move away from real estate residential to real estate commercial was purely because of the high cost to maintain the residences on Mahé including that of its tourist establishment on Praslin which SPF is backing away from competing with tourism on the island.
He noted that a lot of people do not understand how the pension fund actually operates and that it is not easy. He explained that the operation of SPF is a balance between risk, investment and at the same time it has to look at the risks that bring a return.
He further noted that in the past SPF spent a lot of time, money and efforts, buying properties without any idea of what to do with them. He stated that those days are long gone and the assets being disposed are simply because of high costs of maintenance and for pension fund not to be seen in the business of competing in the tourism sector.
During the ceremony, Elpah Bonnelame, who won a contest to find a name for the building, was presented with her prize. The naming competition for the building took place throughout the whole of June 2021 where 185 names were proposed. The ‘Dreamgate Complex’, the winning entry, was among the top four most liked names that were submitted to the board for selection and approval. The name represents the gateway for the achievements of dreams of the entrepreneurs and tenants.
Ms Bonnelame, who works at the Ministry of Agriculture, Climate Change and Environment said that it did not take her long to come up with the name as a dream is always the gateway to start a business.
The accompanying photos show some highlights of the launch ceremony yesterday.
Photos by Joena Meme