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Kampala Infrastructure

Increasing supply of office space pushing prices down in Kampala

The increasing supply of office space in Kampala’s Central Business District, coupled with other factors like stress to service financial commitments by property developers is pushing down the unit prices of office space.
Over the last few years, Kampala Central Business District has seen the rise of several multi-floor properties that essentially provide office and commercial space. Key locations that have seen several properties developed include: Nakasero, Kololo, Central Kampala, among others.  As a result office space per square metre has fallen down by up to 60 per cent.

In the last 1990s and early 2000s, available office space in Kampala Central Business prime streets like Kampala Road, Jinja Road, Lumumba Avenue, Yusuf Lule Road, Nakasero road, etc were up to US$30 per square metre. Today this has considerably come down. A building like Workers House, for example, in the heart of Kampala charges up to US$18 per square metre- a difference of up to 60 per cent.
This trajectory of prime office pricing is likely to continue for some time also because the office/commercial space is moving to the formerly residential areas. Today, with relatively better access to social amenities and utilities like telephones, internet, water, good road network in most places, companies prefer to locate their offices in the suburbs that were formerly residential. The price for space in these areas has gone down. These areas are also preferred because they are out of the menacing Kampala morning and evening traffic jams.
It is therefore little surprise that the office for especially the middle level companies is moving to the formerly residential areas of Kololo, Bugolobi, Luzira, Ntinda, Naguru, Mbuya, among others. This trend too is likely to continue for some time, and by so doing further affecting property rates in Kampala CBD.


Recent reports indicated that the delays in operation and effects of the slide in global oil prices are hitting the real estate industry in Uganda already. Many property speculators took loans from the banks to develop residential and commercial property in anticipation for demand once Uganda’s oil started flowing. The rude shock by the global processes means that the oil companies are slowing down, would be new-investors taking up the space, are getting weak-kneed, yet the banks are already knocking for repayments of the loans.
Lugogo Bypass is for example, fast developing into corporate office space preferred destination. In the last few months alone, for example, TATA motor corporation, the Tropical Bank,  South African Airways, EFENET (African Field Epidemiology Network, an international NGO), have shifted their headquarter offices to this fast upcoming location.
Today prime properties let space for as low as US$8 per square metre. Properties in the suburbs of the same quality cost even less.

 

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