The Secretary to the Board of Ubungo Plaza Limited, Mr. HARUN MGUDE talked to East African Business Week's Staff Writer JAMES MWAKISYALA. Mgude is also the Chief Manager Human Resources and Administration of National Insurance Corporation (NIC). Below are excerpts:

How was the idea of developing such a huge real estate originated?

Ubungo Plaza Limited (UPL) was the idea of the National Insurance Corporation (NIC). It was incorporated on March 8, 2000 under the Companies Ordinance (Cap 212). On December 21, 2001 NIC entered into a joint venture and shareholding agreement with the National Social Security Fund (NSSF) and the Public Service Pension Fund (PSPF). However, actual business operations began in January 2005 following a colourful opening by then President Benjamin Mkapa.

NIC began by investing in the venture in 1997, but when the government liberalized the insurance business we had already spent TShs16 billion. It became evident and prudent to incorporate other partners to complete the twin blocks.

The other two partners injected a total of TShs9.9 billion to complete the structure.

Who runs the real estate business of UPL?

The apex body is the Board of Directors that comprises the chief executives of the three organizations NIC, NSSF and PSPF under the chairship of Ms. Hawa Mmanga who is also the Managing Director of PSPF.

However, the day-to-day running of the business is done by the internationally renowned real estate company of Knight Frank (T) Limited. The only full-time employee of Ubungo Plaza Limited is the Chief Accountant.

Is that a useful way of doing business for the company?

Yes. It is very economical because Knight Frank is paid on commission basis. The company does the management and marketing for Ubungo Plaza building. It has to find tenants and ensure they pay their rents.

What is the current occupancy rate?

The occupancy is 100% and our rents are very competitive, at US$10 per square metre which is a far cry from Dar es Salaam City centre rentals that stand between $12 and $20 per square metre. That includes $2 for services such as water, security and garbage disposal. Knight Frank markets Ubungo Plaza building internationally and locally through its website. It also advertises the Ubungo Plaza locally through newspapers, billboards, brochures, flyers and direct approach as well as in-flight magazines of airlines and the construction review magazine, among others.

What makes Ubungo Plaza one of Dar es Salaam's busiest spots?

Ubungo Plaza is a landmark development in Dar es Salaam comprising of offices, rental units, a shopping centre, 154 hotel apartments and modern conference and function halls with sitting capacity ranging from six to 2,000 people.

Many government and private companies take advantage of the ambiance and quietness to hold meetings here, and many big functions are held here too.

Once the place hosted the Miss World beauty contest and recently President Jakaya Kikwete's son's wedding that was attended by the who is who in the country.

It also has many advantages such as a standby power generator capable of running for eight hours in case of power cuts from the national grid, six modern lifts and an escalator, modern fire detection and fire fighting equipment.

In fact the company has an arrangement with a security firm, Ultimate Security, which can be called upon to deal with any fire outbreak.

It also has ample parking space, 24-hour security and a CCTV system, while the hotel also has a gym for men and for women and a rooftop swimming pool that commands the view of the Indian Ocean to the east and the University of Dar es Salaam to the west.

The company is considering to deal with the water shortage problem by harvesting rainfall from its twin towers. It currently buys water for use in the Ubungo Plaza because initial efforts by the company to drill boreholes for water showed the water in the area was salty.

What do you consider as Ubungo Plaza Limited outstanding achievement?

Return on investment is an outstanding achievement. The building is now fully let and tenants are paying rent as provided in their lease agreements.

Also, the fact that Ubungo Plaza complex is a sound name in Dar es Salaam which attracts local and international conferences. By building here, we have made landed properties in this city outskirt quite valuable. Many people are now putting up multi-storey buildings in the nearby Manzese and along Mandela Road for businesses.

How do you see the way forward?

As stated before, Ubungo Plaza Limited provides offices, retail and hotel accommodation. Blue Pearl Hotel is at a competitive price in the market. We therefore believe that with proper management by a professional and renowned company we will meet our goals.

Does Ubungo Plaza Limited have future investment plans?

We are not in a hurry to invest today. When needs arise, we will go further outside the city and procure land for development.

How long does UPL expect to recoup its investment?

This is a long-term interest and investment. It is good to get returns; we are re-investing for the future. We are currently getting income to pay property tax of TShs130 million annually, and paying out another TShs150 quarterly to NSSF and PSPF being an internal arrangement for the money spent on completing the complex.

However, we think the property tax charged by Kinondoni District Council is too much for the TShs38 billion property. The council charged us property tax of TShs30 million in 2005; it raised that to TShs70 million in 2006, and nowto TShs130 million. That is too much. We are in discussions with the district council to lower the property tax to reasonable levels.

Do you extend corporate social responsibility to your neighbourhood?

Yes. For example, last year we contributed financially to the new Ubungo Plaza Primary School and to the local government in the area.