{UAH} REAL ESTATE entrepreneur
http://www.monitor.co.ug/Business/Prosper/REAL-ESTATE-entrepreneur/-/688616/2238244/-/140coev/-/index.html
REAL ESTATE entrepreneur
Anatoli Kamugisha was looking for a solution to the unsightly slums when the idea of building a real estate empire cropped up. Then he built the multi-billion shilling firm Akright.PHOTO BY RACHEL MABALA
By FARIDAH KULABAKO
Posted Monday, March 10 2014 at 16:49
Posted Monday, March 10 2014 at 16:49
In Summary
The failure to complete his civil engineering course at university thrust Kamugisha into the business world. At 26, he set up a company that later closed. Then he decided to reduce slums by building a real estate- one of the largest in the country.
Elegance defines the stunning beauty of Akright Kakungulu satellite city that sits on a two-square mile piece of land, 18km off Kampala-Entebbe highway.
The multi-billion satellite city is one of the well-organised settlements in Uganda, developed by Anatoli Kamugisha, a renowned real estate entrepreneur who built a real estate company from scratch.
“I did not have cash when I started; my capital was determination and innovativeness,” a passionate Kamugisha whose entrepreneurial journey is a typical ‘rags to riches narrative’, tells Prosper magazine.
Kamugisha’s rocky start
Born in a peasant family in Western Uganda in 1963, the self-made entrepreneur with a sharp eye for money spinning ventures had a difficult start in life but beat the odds to become who he is today.
Born in a peasant family in Western Uganda in 1963, the self-made entrepreneur with a sharp eye for money spinning ventures had a difficult start in life but beat the odds to become who he is today.
Although he was unable to complete his civil engineering course at Kyambogo Polytechnic College due to financial constraints, Kamugisha who was bitten by the entrepreneur bug at an early age vowed never to be a failure in life when he formed his first company –Kanoblic, dealing in construction work at the age of 26.
Although he didn’t have money, Kamugisha convinced his closest friends who were already working to support him with the establishment costs that involved registration fees.
“I didn’t have any money but I had mobilisation skills; I mobilised a few friends who were already working to contribute some little money to register the company.
“My mindset was not that ‘its money which starts a business,’ I believe an idea is what starts a business. That’s why I was convinced that once the company is registered, we would get contracts,” he explains.
Although things were going well at the start, failure by some companies to pay for services threatened to pull down the company.
Although things were going well at the start, failure by some companies to pay for services threatened to pull down the company.
Realising that the company was destined for a collapse soon enough, Kamugisha’s entrepreneurial gene kicked in. He wound up Kanoblic to form a real estate company, dealing in the construction of well-planned houses as a solution to slum establishments that were mushrooming in Kampala.
Executing the Kakungulu satellite city project
Although Kamugisha had acquired the land in 2002, he did not have money to build the dream houses in the satellite city.
But as an innovative man, he decided to exchange services for services to get the project moving.
Although Kamugisha had acquired the land in 2002, he did not have money to build the dream houses in the satellite city.
But as an innovative man, he decided to exchange services for services to get the project moving.
To solve the financial constraints, Kamugisha approached architects to draw a plan for the project even when he had no cash to pay them.
Paying labourers with land
Instead, he exchanged plots of land in return and the same was done for lawyers who drafted agreements and contractors who paved roads in the estate.
Instead, he exchanged plots of land in return and the same was done for lawyers who drafted agreements and contractors who paved roads in the estate.
Kamugisha explains how he exchanged clay excavated from part of the Kakungulu project land with Uganda Clays Kajjansi for roofing tiles.
“This valley is where we got wealth. We didn’t have money for roofing tiles yet it had been decided that all houses in Kakungulu must be roofed with tiles. So we utilised what we had to get what we didn’t have,” the 51-year old Kamugisha says.
“This valley is where we got wealth. We didn’t have money for roofing tiles yet it had been decided that all houses in Kakungulu must be roofed with tiles. So we utilised what we had to get what we didn’t have,” the 51-year old Kamugisha says.
Because of blackmail and negative publicity from some detractors, the first houses and plots of land at Kakungulu were bought mainly by friends.
This enabled him to raise funds to buy other building materials that could not be barter-traded such as cement.
This enabled him to raise funds to buy other building materials that could not be barter-traded such as cement.
Today, the Kakungulu satellite city has grown into a popular organised settlement, comprising all categories of residential houses, commercial establishments and recreational facilities that include a golf course, nature park, schools and clinics.
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Spotting housing gap
In 1999, Akright Projects Limited was born to provide a solution to slum development.
In 1999, Akright Projects Limited was born to provide a solution to slum development.
“My experience at Kanoblic showed that there were lots of haphazard developments and lack of orderliness in building individual residences around Kampala and many other towns.So I conceived the idea of solving that challenge by availing organised residences in planned estates,” he explains.
Kampala has a number of slums including Katanga, Kikoni, Kimombasa and Kamwanyi, among others.
Despite taking the risk, Kamugisha was uncertain whether his solution would see him climb the radar from poverty to wealth as his success would come full circle much later.
Despite taking the risk, Kamugisha was uncertain whether his solution would see him climb the radar from poverty to wealth as his success would come full circle much later.
With financial support from financial institutions and a few friends, he accumulated reasonable capital to nurture his dream.
Kamugisha’s trials
Kamugisha had a considerable number of challenges but he vowed never to let them pull him down.
Key among the challenges was when Akright borrowed funds from Shelter Afrique, Nairobi and developed the Namugongo real estate project only to be told by the Uganda Transmission Company Limited (UETCL) that some houses were to be demolished to pave way for erecting power transmission lines.
Kamugisha had a considerable number of challenges but he vowed never to let them pull him down.
Key among the challenges was when Akright borrowed funds from Shelter Afrique, Nairobi and developed the Namugongo real estate project only to be told by the Uganda Transmission Company Limited (UETCL) that some houses were to be demolished to pave way for erecting power transmission lines.
“When we bought the land, it didn’t have any caveat and our physical master plan was approved by government. We asked to be compensated but UETCL said it would only pay for the houses which will be broken down, claiming that their project had been approved before ours,” he explains.
He adds: “When bankers had of the conflict, they recalled the loan immediately saying we didn’t do a thorough due diligence. The Shs500-million compensation from UETCL was not enough to pay back the entire loan so the bank sold property and this was a big blow to Akright.”
He adds: “When bankers had of the conflict, they recalled the loan immediately saying we didn’t do a thorough due diligence. The Shs500-million compensation from UETCL was not enough to pay back the entire loan so the bank sold property and this was a big blow to Akright.”
Pioneering real estate
As one of the pioneers in Uganda’s real estate business, Kamugisha says the sector was so challenging in the initial stages due to lack of infrastructure and financing for the sector.
As one of the pioneers in Uganda’s real estate business, Kamugisha says the sector was so challenging in the initial stages due to lack of infrastructure and financing for the sector.
“No bank was willing to lend us money to invest in real estate back then. There was no mortgage finance and no line of credit to finance real estate development,” Kamugisha says, adding that it was only Housing Finance Bank which used to give mortgages to government employees to buy houses constructed by National Housing and Construction Corporation.
He adds that he was, on several occasions, frustrated by banks which refused to give him loans, saying he was ‘day dreaming.’
“Banks refused to lend me money for the project but I said no one would frustrate my dreams. I said with or without the money, I will make my dream a reality and the project is now alive.”
He is, however, quick to say that has changed now, with a number of banks having mortgage products on the market.
“Banks refused to lend me money for the project but I said no one would frustrate my dreams. I said with or without the money, I will make my dream a reality and the project is now alive.”
He is, however, quick to say that has changed now, with a number of banks having mortgage products on the market.
Real estate sector lacks housing policy
Despite the commendable growth posted over the years due to increasing demand for organised housing units and an increase in mortgage products on the market, Kamugisha says lack of a clear housing policy is constraining the sector.
Despite the commendable growth posted over the years due to increasing demand for organised housing units and an increase in mortgage products on the market, Kamugisha says lack of a clear housing policy is constraining the sector.
“Government is not coming out clearly on housing policy issues and this is affecting the sector. We have no standard. That is why slums keep coming up. If nothing is done, Uganda will become a national slum.”
He also notes that high mortgage rates are hindering sector growth.
He also notes that high mortgage rates are hindering sector growth.
Kamugisha’s advice
He urges potential entrepreneurs to identity what they can do best and endure to see their enterprises grow to the next level.
“Many young entrepreneurs want quick money; that’s why they fail. Others think it is money that starts business, which is wrong.
Kamugisha adds, “Money doesn’t start a business, it’s the idea. Money is an accelerator. They should be patient and learn how to overcome challenges because they are part of business.”
“Many young entrepreneurs want quick money; that’s why they fail. Others think it is money that starts business, which is wrong.
Kamugisha adds, “Money doesn’t start a business, it’s the idea. Money is an accelerator. They should be patient and learn how to overcome challenges because they are part of business.”
Lessons learnt
He says his biggest lesson has been rising above challenges and pursuing his dream irrespective of whether he has physical cash or not.
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“I have learnt that once you have a good idea which you think can solve society problems, go for it. You don’t need to have money to solve a problem. Once you attempt to solve the problem, it will magnetise money and it will come.”
He also says believes in partnerships, patience, being innovative and interactive. Integrity, he says, is also important plus taking life easy.
“As an entrepreneur, many things can bring you down or lift you. But you should learn to accept whichever comes. If it’s a problem, accept and look for solutions of how to go about it,” Kamugisha says.
He also learns from his mistakes.
“As an entrepreneur, many things can bring you down or lift you. But you should learn to accept whichever comes. If it’s a problem, accept and look for solutions of how to go about it,” Kamugisha says.
He also learns from his mistakes.
“I have made many mistakes but also learnt from them. It has been a chain of correcting mistakes.”
Future plans
Future plans
Although most local companies have shied away from the stock market, according to Kamugisha, Akright Projects Limited intends to take a bold step in about two years to list on the Uganda Securities Exchange.
“Kamugisha is a very entrepreneurial man who knows the value of relationships. If there is any person who knows how to create partnerships, it is Kamugisha. You can’t be a good entrepreneur if you can’t relate well with others because that’s the beginning of success. Anatoli fears no challenges. He is not afraid of taking huge risks because that is where there is money.”
Mr Alex Kamukama,
chief executive officer, Akright Projects
Mr Alex Kamukama,
chief executive officer, Akright Projects
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