6 August 2018

Uganda: Kampala Properties Losing Clients to Suburbs - Report

Kampala — Companies are increasingly opting to rent office space outside the Kampala Central Business District (CBD) as they seek to cut costs and avoid congestion, a report has indicated.

According to a report prepared by Knight Frank, one of East Africa's largest property valuation and consultancy firms, sporadic industrial pockets continue to develop along various axis outside Kampala, which could also explain the shift as companies move out of Kampala.

Mr Gideon Badagawa, the Private Sector Foundation Uganda executive director, told Daily Monitor at the weekend that a number of reasons such as congestion and cost of maintaining an office in the CBD could explain the shift.

"Key services that previously pulled most people into the CBD such as banks and supermarkets, among others are now well established in the secondary suburbs," he said, explaining that companies have found it more affordable to establish offices in suburbs of Ntinda and Bugolobi, among others.

The Knight Frank report analyses a number of sectors, especially growth trends in retail, office and residential spaces in the real estate sector.

Industrial pockets, include Matugga, Bombo Road and Luzira, among others, according to the report have also seen an increase in development activity in such areas and have impacted land prices that have skyrocketed from Shs20m to an average of Shs70m per acre.

This, the report says, has also influenced the location of supermarkets and retail stores such as Shoprite and Pep Stores in the first half of 2018.

For instance, the report indicates, Shoprite is in the process or has already established three outlets outside the CBD in Kamwokya, Bugolobi and Entebbe.

Ntinda, parts of Muyenga and Kansanga, Kamwokya and Bugolobi have in the last 10 years seen an increase in office occupancy, especially for non-governmental and civil society organisations.

The trend has seen growth in eateries and restaurants as traders seek to tap into the growing office influence.

This has also increased Uganda Revenue Authority (URA) activity in such areas in a bid to bring tax services closer to people.

Mr Ian Rumanyika, the URA public and corporate affairs manager, said the move is good for business growth and revenue collection.

"We have [also] moved outside the CBD. You have seen our new offices in Nansana, Natete, Kyengera, Kyaliwajala and existing [ones] in Mukono, Entebbe ... mainly to facilitate the growing businesses located outside the CBD," he said.

The shift has been happening for at least 10 years. However, it is beginning to affect office occupancy for prime properties around Nakasero, Kololo, Naguru and Bugolobi, among others.


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