The office space rentals have suffered a significant downsurge compared to the rental, and http://chagoscantina.com/wp-admin/includes/translation-install.php industrial and residential sectors with prime rents falling to as low as USD 12 per square metres.
This is according to Knight Frank’s outlook on Kampala’s real estate market performance for the first half of 2016. The report which was launched Friday indicates that yields for office space stabilized between 9% and 10%.
There’s also increase in take up for office space specifically by government agencies, page http://d4462130.u92.platformpublishing.com.au/wp-content/plugins/events-manager/admin/bookings/em-person.php financial services and multi-national companies.
While Knight Frank anticipates that the property market will be steady in the next half of 2016, high commercial borrowing rates by banks remain a major hiderance.
“One of the biggest deterrents of home ownership for mortgage buyers who are the majority of purchasers is the unaffordable bank lending rates (22% to 25%). This is also partly why loan repayments are not being met and property repossessions are increasing,” said Judy Rugasira the Managing Director Knight Frank Uganda, a leading real estate consultancy.
She also revealed that the February general elections contributed to a slowdown in the market due to negative sentiments and speculation of violence.
Despite the economic pinch, Marc Du Toit the Knight Frank Head of Retail Property Management says Kampala is beginning to attract big international retail franchise which is indicative of Uganda’s potential.
PEP, Timbaland, TBT and Yum Foods (Pizza Hut) are the most recent to enter the market while Adidas looks to make an entry in August. Two other big Sub Saharan supermarket chains are also in discussions to set up shop locally.
The retail sector has been subdued compared to the same period in 2015. This was further excesebated by retail tenants requesting their landlords to have their rent paid in local currency.
Residential property experienced an increase mainly in the greater Kampala Metropolitan areas of Kira, Nalya, Najjera and Namugongo which are increasingly becoming popular for middle income home owners. On the contrary, the high end market suffered a downward collection of approximately 10% to 15%.
While this is the case, there’s still a significant gap in housing especially for low income class.
Rugasira attributes this to monopoly of private developers adding; “The housing problem will only be addressed if government through NSSF, National Housing get involved in property development on a large scale.”