OutToLunch: You don’t have to be a magician to own part of magical Dubai

By Denis Jjuuko

You have probably seen the twisted skyscrapers that kiss the sky or those that actually define surrealism. And maybe during the New Year celebrations, you saw the Burj Khalifa — the world’s tallest building — being lit up with all sorts of fireworks. Probably you thought the ones you see in Kampala are just like sparks from a welding machine!

You probably thought it is those rich Arabs that own such buildings and convinced yourself that such stuff is out of your league. Even the fantasy league. Wake up and smell the coffee. It may only be impossible if you wanted to own the entire Burj Khalifa, which doesn’t make much sense. Why would you want to do that? Very few Emiratis own such as well.

Unlike most of us, people in the developed world learnt long time ago that being owner of a small piece of something so huge is more profitable than owning the whole thing that brings in so little. To be honest, I once heard Charles Mbire say something similar. Owning 2% of MTN may be more profitable and less stressful than owning 90% of that telco that a certain minister wants people to show their patriotism by forcing them to have the blue simcards.

Let me simplify it a bit. If you want to eat beef, you go and buy the portion that you can afford and other people take what they can afford too. You don’t go around buying a whole cow unless if you have a huge ceremony you are organizing. And properties are like that too. You can buy a studio, a 1-bedroom, 2-bedroom or 3-bedroom condo in a building like the Burj Khalifa.

Today, you can be a landlord in one of the fastest growing cities in the world. Dubai is magical and you don’t have to be a magician to be one unless of course if you want the whole thing. Companies like Danube build beautiful towers and sell apartments to people from across the world. You simply buy a condo and get people to pay rent.

Dubai is probably the only city in the world where a dollar rate has remained the same for the last 16 years. So that means profitability. And by the way, in Dubai a tenant pays rent annually. So there isn’t running around with tenants who go under the bed once they hear you are around. And properties come furnished, so a tenant only brings sleep. I have had an opportunity to see some of these apartments on sale. And oh boy, it is heaven on earth. The word luxury doesn’t really explain what you get. Unlike some apartments I have seen here in Uganda with bedrooms the size of a walkway, on average a studio in Business Bay is between 315-647 square feet (29.2-60.1sqm) in size while a one bedroom is between 480-1350 square feet. I won’t talk about the city’s modern architecture today lest you think the Ruler of Dubai has put me on a retainer.

And let me whisper this to you, if you own a property in Dubai, you pay zero taxes. Whatever your tenant pays is your money. In London, a property worth USD0.5m pays taxes of 2.33% and 2.219% in New York. What about titles? It is freehold, which is English for Private Mailo Land.

Now you are going to claim it is expensive? It is actually more expensive to buy a 3-bedroom apartment in Kololo than in an affluent suburb like Business Bay in Dubai. Business Bay is near the Burj Khalifa in what is known as the new Dubai. How much? A 2-bedroom condo starts from around USD246,000 which is about Shs800m. Go ask how much such an apartment costs in Muyenga or Munyonyo. You will thank me later. And you can also get a one-bedroom apartment where actually a living room works as a bedroom for just USD200,000. And in some other areas, apartments are going for just or under USD140,000 — that is cheaper than many SUVs. Dubai has a better return on investment if compared with New York, London, and Hong Kong. Dubai offers a monthly return on investment of 5.82% compared to New York’s 3.91% and London’s 3.21%. Companies like Danube give you 6.5 years to pay at zero interest rates.

And you don’t need services of a witchdoctor to get a visa to Dubai. And if you set from Entebbe on a flight to Dubai, you will be there before one driving to Kasese reaches Fort Portal. About 16 million visitors spend a night in Dubai each year. By 2020, that number would have grown to 20 million people. Those people won’t sleep on the streets.

There is a lady who was building 28 apartments somewhere in Kampala. She used to tell some of my friends that the bank loan was going to kill her. One night she was found dead. Cause of death? Heart attack. True story. I still don’t know what she wanted to do with 28 apartments being built using a loan she couldn’t service apart from bragging. By the time of her death, the two towers were already up. She was struggling to finish them so tenants could occupy them. Why didn’t she sell 18 of them and remain with 10 and be rich forever like those guys in Dubai? Because she wanted to eat the whole cow.

The write is a media consultant and businessman. djjuuko@gmail.com /0758111409