KAMPALA: The growth of Kampala’s prime real estate sector has spilled over into the sub-urban areas of Wakiso district where the retail sector is experiencing a fundamental transformation through improved quality and standards.
This is according to a newly-launched real estate sector report, compiled by Stanbic Properties Uganda Limited, a subsidiary of Stanbic Uganda Holdings Limited. The report, released Wednesday (February 9) in Kampala, was conducted for the period ending December, 2021.
Traditionally, the formal retail sector was concentrated in Kampala’s central business district and a few high-end residential areas in the peripherals particularly Naalya, Lubowa and Entebbe.
But during the survey researchers found the burgeoning retail sector shifting to Wakiso district. This trend is being driven primarily by the increasing purchasing power of the working-class, who predominantly reside in these areas.
“As of December 2021, we observed an increasing trend towards the development of formal super and hypermarkets as well as shopping malls in Sub-urban suburbs in Wakiso and Mukono districts,” Spencer Sabiiti, the chief executive of Stanbic Properties Limited said during the report launch function.
Additionally, the Covid-19 related movement restrictions also forced consumers to increase their retail expenditure within their immediate residential neighbourhood.
The retail sector in Kampala is more vibrant compared to the metropolitan areas of Wakiso and Mukono.
That said, findings from the survey revealed that Kampala’s prime retail malls were facing stiff competition from locally-owned suburban shopping centres in Wakiso district whose market was majorly supported by a higher domestic consumption by the middle-class.
The highest rental rates were registered in prime malls where tenants pay between US$22 to US$27/m 2 /month for prime retail space on the lower floors and between US$12 to 16$/m 2 /month for large space occupiers on similar floors.
“We expect openings of new retail stores and expansion of existing retail stores to remain stagnant or very limited as retailers acclimatise to the post Covid-19 retail environment in the near future,” Sabiiti said.
This is mainly due to the fact that Covid-19 related restrictions have forced consumers to adopt online retail, a tendency that is likely to stabilize and continue.
Sabiiti also noted that several non-governmental organisations are scaling down on their rental space by consolidating their operations in single stand-alone formerly residential buildings as opposed to renting several buildings particularly in areas of Bugolobi, Muyenga and Naguru.
This trend was primarily driven by downsizing due to Covid-19-19 related budgetary constraints faced by foreign funders as well as a growing work from home trend for employees who only use formal office workspaces on an as-needed basis.
ABOUT THE REPORT
Sponsored by Stanbic Properties Ltd (SPL), the inaugural real estate market report gives an overview of the property rates, occupancy rates, valuation and general key drivers in the real estate sector. SPL is the second subsidiary of Stanbic Uganda Holdings Limited after Stanbic Bank Uganda Limited. The company is currently managing a total of 29 properties across the country. Its mandate is to hold and manage the real estate portfolio of Stanbic Uganda and its subsidiaries. The company is currently engaged in valuation, facilities management, maintenance, project management, advisory services, market research and real estate digital platform.