Skyrise Apartments Kololo — Investor Case Study | RFDevelopers

Skyrise Apartments, Kololo — Our Investor Case Study

Introduction: Why Kololo

Kampala is expanding fast. Within that story, Kololo stands apart. Diplomatic presence, corporate HQs, and superior infrastructure create durable demand and price resilience. Skyrise Apartments is our focused response to this premium micro-market: modern, amenity-rich homes designed to capture “flight to quality” tenants and long-term value for investors.

1) Kampala’s Market Signals

Macroeconomics

• GDP growth: 6% in FY 2023/24. Forecast: 6.4–7% in FY 2024/25.
• Strong FDI inflows into construction and high-rise assets.
• Rapid urbanization, a young demographic, and a growing professional class.

Vertical development

• Prime suburbs are shifting from single-storey to towers.
• Scarce land and rising land values make high-rise the efficient model.
• Apartments suit diaspora investors and executives: lower maintenance, professional management, and stable tenant pools.

Prime property snapshot (H1 2024)

• Prime Office Grade A: ~$16.5/sqm/month, ~89.8% occupancy, vacancy +1%, demand stable with supply pressure ahead.
• Prime Office Grade AB: ~$15/sqm/month, ~84% occupancy, vacancy +1%, competition from Grade A and new stock.
• Prime Residential: rents stable, ~81% occupancy, pipeline heavy, buyer’s market dynamics.
• Retail (prime malls): rents stable, occupancy up ~3%, new store openings support outlook.

2) Kololo: Stability Premium

Why Kololo is defensive

• Embassies, high commissions, and international NGOs anchor consistent demand.
• Security standards, reliable utilities, and connectivity set a higher baseline.
• Many leases price in hard currency, creating a natural hedge.

By the numbers

• Property values: up to ~$2,000 per sqm for high-end apartments.
• Typical market rents:
  • 2-bed: ~$2,000 per month
  • 3-bed: ~$2,500 per month
• Grade A office yields: up to ~11.4% in prime addresses.
• Core demand drivers: diplomats, corporate executives, expatriates, diaspora.

Flight to quality

• New, well-specified assets in Kololo hold rents and occupancy even when the broader market softens.
• Premium finishes, security, and management attract top-tier tenants and support rental premiums.

3) Who We Are: RFDevelopers Uganda

Heritage

• Backed by seasoned Kenyan developers with multi-decade execution across high-end residential and commercial projects.
• Proven delivery, quality control, and project governance brought to Kampala.

Our promise: Attainable Luxury

• Uncompromising quality: durable materials and meticulous finish reduce lifetime maintenance.
• Exceptional value: competitive entry pricing for prime Kololo.
• Flexible finance: structured plans up to 40 months to support off-plan buyers.

Prudent perspective

• New to Uganda, strong regional track record.
• We recognize local nuances: regulatory pathways, supply chains, and labor markets.
• We design for construction momentum and disciplined cash-flow management.

4) The Asset: Skyrise Apartments, Makindu Lane, Kololo

Project at a glance

• Address: Makindu Lane, Kololo.
• Scale: 72 luxury units.
• Mix: modern 2 and 3 BHK layouts.
• 2-BHK size: ~125 sqm.
• Pricing: from ~$135,000 with launch incentives.
• Amenities:
  • Swimming pool
  • Fully equipped gym
  • Clubhouse
  • Terrace with BBQ and gazebo seating
  • Children’s play area
  • Landscaped gardens

Product–market fit

• 2-bed units are the investor sweet spot in Kololo.
• Amenity-rich communities command 15–20% rental premiums and lower vacancy.
• Design, security, and professional management align with diplomatic and executive needs.

5) Illustrative Investment Math for a 2-BHK

Initial

• Purchase price: $135,000
• Stamp duty (~1.5%): ~$2,025
• Legal and closing (~1%): ~$1,350
• Total initial outlay: ~$138,375

Income and costs

• Year-1 gross rent: ~$24,000 (assumes ~$2,000/month)
• Rent growth: ~3% per year
• Vacancy allowance: ~5%
• KCCA property rates: assume ~6% of ratable value
• Rental income tax: assume ~12% of EGI
• Management and misc: ~8%

Result indicators

• Year-1 NOI: ~$17,419
• Year-5 NOI: ~$20,165
• Cash-on-cash (Yr-1): ~12.6%
• Cap rate (on entry): ~12.9%
• Exit: conservative price growth ~3.8% CAGR → indicative sale price ~$163,403
• Indicative 5-year ROI: ~76% including NOI plus estimated sale proceeds

Notes: Illustrative only. Actual returns depend on market conditions, lease terms, tax profile, and financing.

6) Ownership and Compliance

• Tenure: Condominium title under Uganda’s Condominium Property Act, 2001.
• Foreign buyers: secure long-term leasehold structures are standard.
• Documentation: individual unit title plus co-ownership of common property.

7) Risk Controls and Buyer Checklist

Key risks

• Macro shocks, construction timelines, lease-up pace, regulatory changes.

Mitigations

• Legal: independent counsel to verify land title, developer registration, and approvals.
• Contracts: review delivery dates, defect liability, default clauses, and payment schedules.
• Milestones: track construction stage gates tied to clear timelines.
• Financing: understand project funding mix beyond pre-sales.
• Market check: validate achievable rents with third-party managers.
• Payment plan: confirm all fees and triggers across the 40-month schedule.

8) Why Invest Now

• Defensive location with structural demand.
• New-build quality that benefits from flight-to-quality behavior.
• Flexible entry pricing and staged payments.
• Real utility for tenants and real durability for owners.

Next step

• Request the Skyrise investor pack.
• Book a Kololo site visit.
• Align on unit selection, payment plan, and delivery timeline.