Uganda Property a Virtual Gold Mine; Investor
Uganda Real Estate Investor
Miraj Baroti, managing director of real estate firm Tirupati Development Uganda Ltd, and equity developers Tulip, was honored last year among “Young Achievers” to watch for by the Uganda National Chamber of Commerce and Industry. He told The Independent’s Haggai Matsiko that the property market in Uganda is a virtual gold mine:
Monday, 4th April, 2011
Tell me about Tirupati
Tirupati is a real estate company, established in 2007. We started with a US$10 million shopping mall and hotel complex in Kisenyi, with 350 units, including 7 restaurants and a hotel. After that we built
Tirupati House on Mawanda Road, Kamwokya; then residential projects in Bugolobi and Luzira; Nsambya, where we are putting up another US$15 million shopping mall with 350 shops; a shopping mall in Kansanga. This year we are starting a business park with 185 warehouses on the Northern By-pass - a huge project worth US$ 25 million. In Naguru, we are putting up 32 apartments worth US$8 million. Basically, we build and sell. So far we have made 500 Ugandans proud owners of residential and commercial property.
You were honored by the Uganda chamber of commerce as a “young achiever”. How did this impact on Tirupati?
It was like a flag-off for me. I felt inspired that people were coming out appreciate what we are doing. We also won the innovation award for Biomedical Waste, our plant in Gayaza. I like to think that young people can look up to me and say, we want to achieve something like Miraj. But I am not doing business in Uganda alone. We are expanding into Burundi, we are already in India. We have many big projects planned.
Which new projects are you working on?
We are kicking off this year with a complex of 32 apartments in Naguru. But the revolutionary project will be the business park, on the Northern By-pass, with 200 warehouses, modern security services, a banking hall, restaurants, etc. We are targeting small and medium businesses, juice makers, mineral water plants, candle makers, warehousing facilities, for people in Kikuubo, Kisseka market to acquire a spot. Once a container of goods arrives from Malaba or any part of the country, it directly enters the business park to the warehouses, and from there owners can take the goods with small vehicles. The cost of renting warehouses is ridiculously high in Kampala. People are paying US$ 8, 10, 12 per square metre in rent. When you multiply this over a year, it is equal to the amount you need to own a warehouse with us. That is a warehouse of roughly 150 metres that we are going to sell at US$ 55,000. When I had a factory, it was too expensive to put up surveillance cameras or flood lights. In the business park, the facilities will be shared and the costs distributed, so you are guaranteed more security, a bigger space and a better environment – all at a lower cost. We have built our own road called the Tirupati Road to give the park direct access to the Northen By-pass. We estimate the park will employ 4,000 people when completed.
What challenges are you encountering with this project?
Infrastructure support is one. We are putting up a US$ 25 million project and on top of that constructing a road from our pocket. The government should be doing this. Secondly people do not understand the condominium law which was passed in 2002 - that you can own or lease something on the top floor without owning what’s beneath it. Thirdly, we are not getting tax benefits like import duty waivers that we are supposed to get. Government needs to understand that once costs are high people are not able to afford property.
You are also the managing director of Tulip, what does it do?
Tulip is an investment group we formed recently. When someone has a viable project but no funds to develop it, we come in, invest and become shareholders. We have been developing projects of the Tirupati Foundation because we have their money and we know we are secured. We also started a million-dollar residential project in Naguru. We just acquired a plot in Bukoto, next to Kabira, where we are putting up the Tulip Tower. Tulip is also constructing a shopping mall and office block in Ntinda. We also provide property consultancy services, helping people get grants from EU European Union for unique value-adding agricultural projects.
As an investor with extensive interests in Uganda, how do you rate is as an investment destination?
It is beautiful. Man. Every time I blink I see an opportunity. It is still a virgin market. There is huge demand for everything. You can sell anything here as long as you plan it. It is a gold mine.
Which are these areas people can invest more in?
I would still come to real estate, not because I am a real estate developer, but because for the country to grow faster, people should own their property. Ugandans should get out of the renting mentality. Own the space where you live or work. It helps become flexible. Secondly, real estate is an appreciating asset. Buy land; if you can’t afford land in Kampala, buy at the outskirts, instead of luxurious things like cars. Agriculture is another area people have not yet tapped into, and yet our land is very fertile.