Overview:
CMA Chief Executive Officer Josephine Okui Ossiya said Buildnet’s phrasing of its advertising content is no longer in breach of the Authority’s laws.
The Capital Markets Authority (CMA) has given the greenlight to Buildnet, a real estate company, to proceed with promoting public investment in its Waterfront Hotel Apartments project located in Munyonyo.
CMA Chief Executive Officer Josephine Okui Ossiya said Buildnet’s phrasing of its advertising content is no longer in breach of the Authority’s laws.
“We have noted that the proposed project taglines no longer include the wording previously identified to be in breach of the Capital Markets Authority Act Cap 64,” Ossiya said in a statement.
In October, CMA said it had not approved the investment scheme where Buildnet was calling upon members of the public to invest a minimum of $99,000 and a maximum of $269,000 for a share in its project located in Munyonyo, with a promise of $700 in monthly returns.
But CMA says after some amendments by Buildnet in the wording of its advertising content, they are now free to proceed with the public calls for investment in the project.
According to CMA, among the advertising taglines for Waterfront Hotel Apartments Munyonyo project, which they have no objection to are: “Guaranteed Rental Income of up to 8.5% per year of your total investment,” “Guaranteed Monthly Rental Income of up to USD……”, “Own a fully Furnished, fully Serviced and fully Managed Hotel Apartment.” And “Zero Hassle for your Rental Income.”
The Managing Director of Buildnet, Dr.Ibrahim Semaganda, on Friday explained that their company was not inviting the public to “become shareholders” in its literal sense, which would otherwise require CMA’s approval.
He added that Buildnet is instead calling potential buyers to own fully furnished, fully serviced and fully managed hotel apartments in its Waterfront Hotel Apartments Munyonyo project that are available for sale.
“This first-of-its-kind investment opportunity comes with a guaranteed monthly rental income of up to USD 1,900 for the first 3 years. This means that the client will be getting such a fixed amount every month, regardless of the occupancy rate of his/her Apartment. This essentially translates to 8.5% of the client’s investment per year for the first 3 years,” Dr Semaganda said in an interview.
“In addition, the property also appreciates at an estimated rate of 6% per year. Therefore, in 10 years the value of the property will have almost doubled, i.e. it will be 200% of its original value. Considering the cash that the client will have recouped, almost 100% of his/her initial investment within this same time period, the result is that one will have realized almost 300% value in the 10 year-period,” he added.
“As opposed to the traditional model where clients are frustrated by long pay-back periods of over 20 years, the hassle to acquire and manage tenants, and maintenance of their Apartments, this New Investment Model enables a client to recoup their investment in only about 11.5 years, moreover hassle-free,” He emphasised.
In its nearly 15 years of existence, Buildnet has emerged as one of the leading real estate development companies in Uganda. It has developed over 500 condominium apartment units in Naalya, Najjera, and Kira, among others.
The projects sold off include Najjera Heights, Olive Homes, Florida Apartments, Creekside Apartments, Raven Apartments, Dove Apartments and Pelican Villas.