Business Tips: Think Again & Invest, Numbers Do Not Lie – Tycoon Rajiv Speaks!

Last month, the Ruparelia Group, unveiled Bukoto Living, 9-floor condominium homes project – altogether, 27 homes in a 2-3-4- and 5-bedroom configuration, in Bukoto, Kampala.

The affluent suburb of Bukoto and the surrounding Naguru, Ntinda is a mixed residential and commercial areas, with a large number of small businesses, NGOs, supermarkets, hospitals, schools and upscale shops.

Bukoto Living itself is built just about 150 metres from the main Kira Road, placing the central business district within just 10-20 minutes.

Bukoto Living comes on the heels of Tagore Living- another Group property, comprising of 28 modern homes, in Kamwokya-Kisementi, just a stone throw-away from Acacia Mall, the Kisementi shopping precinct, Kitante Golf-Course and the affluent Kololo neighbourhood.

In a few weeks, Ruparelia Group will be breaking ground for One-10 Apartments, an exclusive Luxury Homes Project on Prince Charles Drive, in Kololo, comprising of 110 2,3,4-bedroom apartments, also for sale.

Back to Bukoto Living, the 2-Bedroom Apartment– the most affordable option, comes with 160 sqm of space split into 2 bedrooms, a kitchen, living room and dining as well as an additional room for the housekeeper/Maid and a 12 sq/m balcony, that opens up to beautiful views. It costs USD 168,000.

The 3-bedroom apartment costs USD 210,000; the 4-bedroom goes for USD 330,750 and the 5-bedroom for USD362, 250.

At first impulse, this may look like, it is quite on the high side- but think again!

Let us say, there is another alternative option in Najjera (about 13 km away from Kampala City) where a 3-bedroom house on a 50×100 plot costs on average UGX350-400 million (roughly USD100,000). This appears, cheaper, compared to the Bukoto-Living 3-bedroom apartment which goes for USD210,000 (UGX770,000,000)?

Right? But lets us think again

Independent property professionals will tell you, the three most important things to consider, is location, location and location! And I agree, because to a great extent, location also plays a big role in influencing other key variables such as value, expected cash flows and therefore return on investment, convenience etc. Location also determines occupancy rates.

And when it comes to the property itself, you need to critically analyse other factors, like price, quality and durability of materials used, the track record of the developer etc. All these are important for keeping costs of maintenance low, higher future value and post-purchase peace of mind.

Whether, for owner-occupied or investment purposes, you need to make a decision, that will enable you to get more from your investment, as well as do more, should you choose to live in the property as your own home.

Numbers do not lie

According to the Ministry of Transport’s Annual Sector Performance Report FY 2018/19, the travel time in Greater Kampala Metropolitan Area (GKMA) was 4.1 minutes per km which translates to about 14.6Km/hr in 2018/19 compared to 4.2 minutes /km in 2017/18. So roughly from Kampala to Najjera/Kiira/Buwate, a distance of about 13km, it takes an average of 53 minutes to leave home and get to work. But we all know, this is on average, because during peak-time it could take more than 1 hour for a one-way journey.

So in a week, you use up to 10 -12 man-hours a week, depending on if you also work weekends and up 578 man-hours or up to 72 man-days a year! For a working couple, that is a whole 144 man-days a year! This does not include time spent on picking and dropping children to school and other social engagements.

Depending on what you do, this time has economic value both directly and in terms of lost productivity. At the end of the day, how much is your man-hour worth? Let us assume, your man-day of 8 hours is a conservative UGX200,000, that means, a working couple, could lose up to UGX 57,600,000) annually, trying to get to and back from work. Multiply that, by 10 years, the average it takes to pay for a mortgage, the family will have conservatively lost UGX576,000, 000- that’s just about two-thirds of a modern 3-bedroom home in Kololo or Bukoto.

Away from economic value, imagine if your family were able to create a fresh 130 man-hours in a year. Would you use it to sleep better, spend more time with your children, do a self-improvement course, learn a new skill or start a new business?

Imagine the possibilities of doing more!

Another 2012 Ministry of Works and Transport study titled:Average Travel Time & Vehicle Cost in Greater Kampala Metropolitan Area (GKMA), found that on average, an owner of a saloon car spends an average of UGX19,700,000 annually on fuel, repairs and maintenance. And you will agree with me is that much of these costs are influenced by the location of your home which determines the state of roads, security and distance away from the city centre. If a couple owns two cars, the total cost of ownership could reach nearly UGX40 million a year and UGX400 million in 10 years!

That is half of what you need to own a 3-bedroom apartment at Bukoto Living!

If you are buying or building a home as an investment to earn income from, you need to consider the fact that the kind of Grade A properties such as the ones we are developing, attract up to between 80-90% occupancy rates and up to USD2, 750 (UGX10,725,000) in monthly rental income for a 3-bedroom apartment, compared to a maximum of USD380 (UGX1,500,000) in the city outskirts, for a house, the same size.

Do the maths—instead of investing 700 million in two bungalows in Buwate/Najjera/Namugongo, only to earn an irregular USD760 (UGX 2,812,000) why not invest in a 3-bedroom apartment in Bukoto living for UGX770,000,000 and earn up to 3 times more?

Invest with Meera Investments, Uganda’s most experienced, trusted and financially stable property developer

Meera Investments Limited, part of Ruparelia Group- Uganda’s largest business conglomerate, has for the last 25 years been involved in developing several iconic real estate projects in Uganda. With over 300 properties- ranging from hotels, schools, commercial and residential projects in the choicest locations in Kampala, Meera Investments, is proud to be the preferred provider of modern and innovative working and living space solutions to over 150,000 people in Kampala daily.

We have been able to leverage economies of scale to affordably secure the finest locations, employ a combination of local and international teams of designers, architects and engineers, as well as source for the most durable building materials. We pay particular attention to the finer details, such as ergonomic and efficient layouts and beautiful world-class finishes as well as onsite amenities, such as security, lifts, internet, standby generators, swimming pools and gyms etc. The result is a world-class property, at very competitive market rates.

A pre-Covid-19 2019 independent Knight Frank Property Report for Kampala showed that on average, a 2-bedroom residential unit sold for USD225,000 and USD325,000 for a 3-bedroom residential unit. On average 4-5 bedroom houses seated on between 0.25-0.5 acres went for USD1,000, 000.

Now, compare that with the average USD168,000; USD210,000; USD330,750 and USD362,250 for Bukoto Living’s 2-3-4- and 5-bedroom residential units respectively!

Think again!

Numbers do not lie, especially in investing!

Rajiv Ruparelia is the Managing Director of the Ruparelia Group. Consisting of 28 companies, the Group is mainly involved in education, real estate development and management, hospitality, floriculture and broadcasting.

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