NSSF Uganda USD50million Stake in Marriott Hotel and Apartments
NSSF Uganda disclosed that its Board approved the USD50million equity stake in the Marriott Hotel and Apartments located in Nsambya, Uganda after a one-year due diligence. This USD50million translates into a 30% shareholding by NSSF in the joint venture.
The other shareholders include the Ngabirano Group, Capital Shoppers Limited, Marriott International, Roman Catholic Archdiocese and others. Many people are wondering if the NSSF Board made a right and financially sound decision.
In terms of expected revenue streams, the hotel has 181 luxury rooms and 96 premium serviced apartments. The daily rates for these rooms vary depending on size and amenities. One can extract the tariffs from the website (https://www.marriott.com/en-us/hotels/ebbmk-kampala-marriott-hotel/overview/).
The hotel can host local and international conferences. We are not privy to the business case that was reviewed by NSSF management to evaluate the financial projections that convinced the Board. Nonetheless, there is stiff competition in similar hospitality market in Kampala. Serena Hotel (where NSSF has a 20% stake) has over 180 luxury rooms; Sheraton 230 rooms, Four Points 140 rooms, Hilton 250 rooms, just to name a few.
In terms of premium service apartments, Speke Apartments with 140 is top of the mind, and others in upscale areas like Kololo, Muyenga and Naguru. Therefore, the Marriott Hotel and Apartments has to apply both a red and blue ocean strategy to secure and retain hospitality business.
If we assume that the 188 rooms and 96 apartments are 100% occupied 24/7/365 at a rate of USD200/day, the projected revenue would be about USD20million per annum. At a net margin of 10%, it means that Marriott Hotel and Apartments would earn a net profit of USD2million per annum. And this excludes the revenue and profitability from conferences, meals, bar and other amenities.
Furthermore, it should be noted that NSSF will have to wait for dividend declarations by the Board of the Marriott Hotel and Apartments, and its share will be 30% of the approved dividend.
In the 2025/26 financial year, dividend income contributed 5.7% to the total income of NSSF. Members will have to wait until the September 2027 Annual Members Meeting to know whether or not NSSF received any dividend on the USD50million investment.
