PROPOSAL FOR DEVELOPING A HOUSING ESTATE CONSISTING OF 42 UNITS OF 3 BEDROOMED SELF-CONTAINED VILLAS CLIENT:

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1 Introduction The National development Plan of Uganda is placing great emphasis on infrastructural development i.e roads, railway transport, water and energy to support and encourage investment in the various economic sectors. New suburban retail centres are being developed in the suburbs of Ntinda, Naalya, Kabalagala, Lubowa, Seguku, Luzira and surrounds of Entebbe to tap into the market derived from the increasing number of middle income earners settling in these areas. Demand within the real estate sector is dominated by users requiring new/ good quality open space with ample parking. The Uganda real estate market continues to be a lucrative one in terms of development in all sectors of property. In view of the economic development that has taken place in the recent past and the importance of Uganda in the great lake region, many international agencies such as the United nations, USAID, DANIDA, SIDA, and various others have found it convenient and feasible to locate their regional headquarters in Kampala. This is bringing an influx of expatriates into Kampala all of whom need to be accommodated. There is already a shortage of living and office accommodation in Kampala and Entebbe due to the emerging middle class population consisting of businessmen and office goers and also the increasing economic activities. Under the circumstances it will be a wise proposition to venture out and develop housing estates to cater for the growing demand for living accommodation. Residential 1

2 Whilst there have been an increasing number of privately owned residential schemes coming onto the market for rent in the past 2 3 years, there are also a number of bigger schemes (50 to 100 apartments) being developed to target the top-end of the market for sale. These include Springhill s apartments in Lubowa, Royal Palms in Butabika, Palm Villas, Castle apartments, Kensington in Kyanja, Top Villas, Chartsworth and the various NHCC estates to name but a few. The demand for affordable housing has continued to grow in line with Uganda s population growth rate of 3.5% per annum and the banking institutions have contributed greatly to private home ownership through mortgage financing. However, there is a shortage of good quality expatriate rental accommodation mainly as a result of the change of user in the once prime residential suburbs of Nakasero, Kololo and Bugolobi from residential to office use. Results from recent survey carried out indicates that demand for good quality housing on average ranges between US$ 400 US$ 1,000 per month depending on location, number of rooms, etc and has outstripped supply. Investment The Uganda economy remains vibrant, particularly with the discovery of substantial amounts of Oil reserves within the Albertine Region. This can only have positive effects on the economic future of the country with great improvements in infrastructure, power supply and development together this has brought an influx of a number of expatriates in oil exploration and production related businesses which has automatically led to a very high level of demand of housing and recreational facilities in the country which can only be provided by the private sector. Likewise the Real Estate sector can only become more active with increasing demand for both office and residential accommodation. An increase in consumer spending coupled with our rapidly growing population can only result in a more vibrant retail sector. 2

3 With predicted growth in property values and lower returns in other financial markets, investors are keen to enter the Real Estate sector. PROPOSAL The Investors Considering the highly conducive investment climate in Uganda, the promoters IBS AFRICA LTD, a Company registered and incorporated in Uganda, with its registered offices situated in Kampala are proposing to embark into establishing a housing estate complex and are seeking financial assistance with potential investors to execute the project. Consultants The Company has discussed this project with various Business Consulting and project Management Companies. The Project The investors will acquire sufficient area of suitable land on the Kampala- Entebbe Road where it is comparatively cheaper. Land is available in this area at about UGX 150 to 200 Million an acre and an area of 4 to 5 acres would suffice to put up a medium scale housing estate consisting of 42 units of approximately 144 sq.m built in area per unit of storeyed 3 bedroomed self contained living accommodation of reasonably good standards with common utilities, facilities and amenities. These houses when finished could be let out on rent to international agencies or even sold out to readily available willing private buyers. 3

4 DESCRIPTION OF PROPOSED DEVELOPMENT: The plot of land intended for the project will be developed with the following facilities: Perimeter Road The facility will have 6 metre wide perimeter tar macadam road of approximately 820 metres Block Roads A total of km of 4 metre wide tarmac roads between blocks of houses as shown in the schematic layout. Drainage The roads will drain into a 0.6 metre deep storm water drain which will be led out to the main drain outside the campus Block Drains Shallow drains between the blocks of houses will be provided to carry storm water into the main perimeter drain. Street Lights Street lighting will be achieved by installing one water proof fluorescent light on lamp post inside each compound focusing on the road and operated by the occupant of the house Landscape 4

5 Landscaping will consist of trees (of species like cherry blossom, Cassia siamia, Neem, etc) planted on three sides of the housing layout to provide a natural atmosphere around the estate. Bungalow Compound Lawns will be planted on the free inside the compound. Each compound will be demarcated by survey stones and separated by hibiscus or other species of hedges. There will be a compound wall erected by the contractor for each housing unit or block depending on design of structures to be set up. Common Facilities The following common facilities will be provided: Community Hall, day care centre, recreational facilities Shopping Centre A Shopping Centre consisting of about 15 shops at the entrance of the estate will be built adjoining and perimeter of the estate which will provide services for the convenience of residents such as Mini Supermarket, Restaurant, Clinic, Business Centre, Beauty Salon, Tailor Shop, Maintenance Department And Security. Water Supply A common overhead reservoir of adequate capacity will be provided in addition to individual service tank with independent metering arrangement to ensure continuous municipal piped water supply. Electricity 5

6 Each bungalow will be connected to the National Grid with independent house meters Security An office for the security personnel will be provided in the shopping centre which will be utilized by the security company contracted by the residents. Maintenance An office for the maintenance personnel will be provided in the shopping centre which will be utilized by the maintenance company contracted by the residents. DESCRIPTION OF BUNGALOW ACCOMMODATION 42 units of 3 bedroomed storeyed self contained bungalows with built area of 144 sq. metres. Ground floor accommodation One Master Bed Room with attached Bath with standard fittings, shower stall and Toilet, Guest toilet, living room with Dining recess, kitchen with sink and work table, store, garage, boys room (self contained) 1 st Floor Accommodation Two bedrooms with common bath and toilets, sit out, open terrace, standard fittings and finishes with undercoat and two coats of white plastic emulsion paint. 6

7 Estimated Cost of the Project Land: As stated above cost of land will be in the region of UGX Million per acre. Development: Developing this land to required standard by constructing roads, drainage, providing electricity and water connection will cost another UGX bn Construction: it is estimated that a 3 bedroomed living accommodation with living room, dining, kitchen, attached bath and toilets, stores, boys quarters, garage, utilities, etc. with reasonable standard of R.C.C construction will cost approximately UGX Million per unit Time Frame: It is estimated that the project can be completed in about months duration if funds are available on time AND FURTHER 6 MONTHS FOR SALE. Return on Investment OUTRIGHT SALE If the houses are put on sale then we can expect an average price of UGX Million and the 42 units will fetch UGX Billion giving a profit margin of approximately UGX Million per unit amounting to UGX Billion which will of course be subjected to taxation of 30% leaving a balance of UGX Billion (UGX Million) of which an agreed fee will be paid to the promoters as their share of profit leaving a balance of more than US$ million net profit to the financier over a period of 30 months. 7