16 Oct 2017 - Uganda (Kampala)
In the past week, I have been in Kampala, Uganda's capital, working to update and consolidate our commercial property database.
Kampala is about an hour drive from Entebbe airport and Lake Victoria. The city is lush with greenery, hospitable and relatively compact given its population of about 2 million.
Commercial properties are concentrated on the hill which hosts the CBD, Shimoni and Nakasero Neighborhoods. The latter, after being rezoned has increasingly opened itself to redevelopment, which in the past decade saw the traditionally upscale residential area shift towards hospitality and high quality commercial properties. The neighboring areas of Kitante and Kololo are also seeing some development, but ultimately seem to suffer from not having been formally rezoned and as the bulk of the demand apparently is already being satisfied by the former areas.
In our view, CBD and Nakasero represent about 80% of the market, which, thanks to the addition of 20+ new properties, now includes more than 80 buildings, for a cumulative stock of about 350.000 sq. m, and about 15.000 sq. m in the pipeline. Our database consists mostly of grade A and B buildings, with grade C buildings only amounting to 7% of its total share.
The looming political uncertainty surrounding the constitutional changes proposed by current president ultimately plays a big role in the future of the country, Kampala and consequently its real estate market, which, when stabilized, offers good potential in terms of growth and investment.