Nestled amidst the bustle of Mexico Square in Addis Ababa is an unlikely epicenter of real estate frenzy gripping the Ethiopian capital. It is located on the fifth floor of what its owner calls the Sengatera Negadewoch Hibret Building.
Through its door, there was a constant flow of eager visitors with paperwork in hand, clutching at hopes of securing what the company inside touted as "the real estate deal of a lifetime" - ownership of a luxury apartment for a fraction of the market value, guaranteed merely through purchasing a single share.
The enterprise behind this alluring offer is Purpose Black, a two-year-old firm founded with a lofty vision of constructing Africa's tallest skyscraper, the 115-story Ke'Geberew Tower. To fund their ambitious 15 billion Birr project, Purpose Black embarked on a campaign offering shares in the building's development that were linked to ownership of apartments.
The first 1,000 shares were priced at the steep seeming amount of 1.5 million Birr each. However, purchasers were enticed not only by potential long-term capital gains but also the promise that each share came bundled with title to a 100sqm, three-bedroom dwelling in the tower.
Considering apartments of that size in Addis routinely sell for three to four times that amount, it seemed Purpose Black had found the perfect formula to generate billions in startup capital while promising to deliver property possessions far beyond market value to early shareholders.
Frenzied Interest
No shortage of takers emerged. By their accounts, Purpose Black sold out their opening share allotment within a single week, raking in 1.5 billion Birr from eager Ethiopians and diaspora hopeful to secure such a lucrative real estate package.
Encouraged, Purpose Black announced they would double the price for their second issue to 3.5 million Birr per share. Again, the limited pool of around 750 shares vanished almost instantly according to company representatives. Stories spread of money exchanged hands after frantic bidding wars between multiple interested parties vying for the same allotments.
The company's promotional machine cranked into overdrive as more capital was injected into glossy presentations, infomercial-style advertisements and social media marketing touting Purpose Black as the vehicle to attain property wealth beyond most Ethiopians' wildest dreams.
Their effective PR blitz attracted increasing scrutiny, including from regulatory bodies concerned over the unprecedented windfall profits promised to early shareholders. Some property experts and analysts also questioned whether the share bundle prices and apartment valuations adequately reflected broader real estate market realities.
Long-Term Outlook Clouded
Doubts lingered around Purpose Black's longer-term ability to deliver on their apartment guarantees. Constructing Africa's largest skyscraper represented an immense undertaking unlikely before many shareholder investments matured.
Questions emerged whether sufficient planning and partnerships were in place for a project of such scale and complexity, given Purpose Black's limited three-year history and the fledgling state of Ethiopia's construction sector. What if unforeseen delays or cost overruns struck?
Some raised eyebrows at Purpose Black's leadership as well. Founder and Managing Director Fisseha Eshetu was a charismatic if controversial figure, known for founding Ethiopia's first private university but also embroiled in past business disputes. How sustainable were Purpose Black's lofty goals and timelines under his control?
Such concerns went unanswered as Purpose Black tightly controlled the share sale process and release of financial details. Applicants had little option but to trust in the company's promotional materials and take a risk in hopes of securing the promised windfall.
With interest off the charts, Purpose Black announced their third and supposedly final share issue, this time at the astronomical price of 10 million Birr each. Demand from investors eager to lock in apartments before the deadline or afraid of missing out entirely seemed assured to push round three’s limited allocation of just 4,000 shares.
All systems appeared set for Purpose Black to substantially complete tower financing. But behind the scenes, trouble was brewing that threatened to derail their ambitious property share scheme entirely and leave multitudes of aspirational homeowners empty-handed.
Tower Talks Collapse, Plans Crumble
On March 5, 2024, BGI-Ethiopia announced it had terminated negotiations to sell its headquarters building to Purpose Black Trading, citing a lack of commitment from the buyer. The site in Addis Ababa's Bole district had been intended as the location for Purpose Black's proposed 115-story Ke'Geberew Tower.
In a statement, BGI said it had "diligently pursued negotiations on a draft sales agreement" but the talks reached an impasse due to Purpose Black's failure to demonstrate "genuine commitment" to finalize the deal. Invoking the original agreement's terms, BGI formally ended the transaction while reaffirming its focus on brewery expansion.
However, Purpose Black rejected the termination. It claimed in a statement to have paid a 1.15 billion birr deposit for the property and accused BGI of cancelling "for no apparent reason." Purpose Black board chairman Ermias Berhanu said the contract was not ordinary and could be renegotiated, threatening legal action if BGI refused to sign a new agreement.
For the thousands of Ethiopian investors who contributed millions to Purpose Black based on promises of subsidized apartment ownership within the future tower, the failed headquarters sale is a blow. They are left grasping for remaining hope as the fantasy of their investments underpinning Africa's largest building fades.
Witnessing Purpose Black's proposals unravel piece by piece—from regulatory issues to failed deals to questions over funds—these once hopeful shareholders are losing faith their bets won't fully deflate. As legal troubles and doubts plague the foundation of their investments, only a miracle seems able to reinflate Purpose Black's now troubled vision.