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Real Estate Market Survey Report-Uganda (Namanve Business Park) Report Written By Ojijo Pascal, Independent Business Consultant (Feasibility Studies, Financial Projections, and Strategic Planning) Summary Prominent commercial buildings are losing tenants to new developers. New developers are discounting their rates in order to secure badly needed revenue streams necessary for repaying bank loans and avoiding seizure of assets due to defaulting. Improved roads and increased commercial farming activity in strategic neighbouring areas of Kampala are also likely to spur substantial growth in new projects. The sharp rise in demand for low-cost housing and strong uptake of new low-cost housing projects are projected to continue in the coming year. However, the warehousing market segment is still uncharted waters. (Lamudi, 2015) Growth According to the Uganda Infrastructure Report (2014), the construction industry is expected to grow by 12.92% from 2014 for the decade, to peak a value of US$2.74bn. Double digit growth is anticipated every year peaking at US$8.18bn by 2020. There is likely to be prominent commercial buildings losing tenants to new developers. New developers are discounting their rates in order to secure badly needed revenue streams necessary for repaying bank loans and avoiding seizure of assets due to defaulting. For example, some of these developers are quoting rates as low as $9 per square metre compared with similar space offered by bigger facilities like UAP Commercial offices located in Nakawa, which charges $14 per square metre. This trend has also led to loss of clients by highly priced residential apartments located in the Kololo area. Improved roads and increased commercial farming activity in strategic neighboring areas of Kampala are also likely to spur substantial growth in new housing projects. Further, the sharp rise in demand for low-cost housing and strong uptake of new low-cost housing projects are projected to continue in the coming year. Real estate experts attribute this to high levels of debt exposure suffered by new developers and emerging signs of political tensions ahead of the 2016 general election that have scared away investors and eroded appetite for prime office space. This will also be bolstered by the projected growth of Uganda’s economy. Uganda’s economy is estimated to expand by a robust average of 6.9% in the next five years, according to the International Monetary Fund (IMF). Prominent commercial buildings have lost tenants to new developers. For example, some of these developers are quoting rates as low as $9 per square metre compared with similar space offered by bigger facilities like UAP Business Park located in Nakawa, which charges $14 per square metre. Real estate experts attribute this to high levels of debt exposure suffered by new developers and emerging signs of political tensions ahead of the 2016 general election that have scared away investors and eroded appetite for prime office space. Falling prices for commercial office space, a rise in new housing projects in prime areas neighbouring Kampala city and the completion of low-cost housing projects are likely to influence trends in Uganda’s property market in 2015, according to a new report (Lamudi, 2015). The demand for housing, both commercial and residential, is growing at a rate that exceeds supply. According to the Uganda Infrastructure Report (2014), the construction industry grew to reach a value of US$2.74bn in 2010. Further, regional integration, urbanization, and economic growth, leading to more local and cross border trade; in addition to the oil sector growth, will lead to more demand for storage space. Demand & Supply for Warehousing Uganda Infrastructure Report (2014) decries the lack of organized, strategically situated storage facilities in the market. There are off-shoot commercial offices across the city, exemplified by Tirupati’s own Kawempe commercial offices, but they offer limited facilities, and lack adequate parking yard and complimentary services like banks, restaurants, and offices. Further, they are not extensive enough to offer backward and forward linkages to tenants, nor are they placed as strategically as along the northern by-pass. There is need for large scale, affordably priced, well organized commercial offices that combine accessibility with mix use of warehousing and service facilities. There are several off-shoot, mid-zised warehouses in Owino market area, as well as in other locations of the city, buy these are limited in size, and do not allow for heavy vehicles to park, and load or offload. Tirupati Business Park, along notherm by-pass, is the largest warehousing complex so far, with multi-use features. The warehousing rental rates in the Seeta area, and industrial areas in Kampala (along Jinja Rd in Nakawa, are at average of USD. 8 per sqm. The same rates apply for the regions near the markets at Clock Tower, with newly constructed warehouses. However, their capacities are within the 20sqm range, and hence, only suitable for low end, small volume, materials. About Namanve Business Park (Kampala Industrial Business Park) Kampala Industrial and Business Park (KIBP), also referred to as Kampala Business and Industrial Park or Kampala Industrial Park, is an industrial and business park in Uganda. The park was developed by the Uganda Investment Authority, as a central place where investors can locate factories, warehouses, distribution centers and other business offices. KIBP is located in Namanve, Kira Municipality, Wakiso District. This location is approximately 15 kilometres (9.3 mi), by road, east of the central business district of Kampala, Uganda's capital and largest city, on the Kampala-Jinja Highway. The industrial park was created by act of parliament in 1997. An area measuring 894 acres (362 ha), previously occupied by a national eucalyptus forest was de-gazetted for that purpose. Over 200 businesses acquired land and space on concessionary terms, to establish their businesses in the new business park. The following businesses are located at Kampala Industrial and Business Park Namanve: Roofings Rolling Mills - With Headquarters in Lweeza, Roofings has a new plant at Namanve, employing in excess of 2,000 people. This plant is connected to the Uganda Railways grid. Hima Cement Limited - With the main factory located in Hima, Western Uganda, Uganda's second-largest cement manufacturer maintains a large warehouse and distribution center at this location. Export Trading Company. Kyagalanyi Coffee Limited - A leading coffee processor and exporting company in Uganda, maintains a warehouse in the business park. Victoria Seed Limited. Other nearby businesses include: Namanve Power Station - The 50MW Thermal power plant owned and operated by Jacobsen Electro of Norway is located in the neighborhood called Kiwanga, in nearby Mukono District. Namanve Coca-Cola Factory - Located across the Kampala-Jinja Highway from the industrial park, this soft-drink bottling factory is one of two Coca-Cola bottlers in the country; the second factory is located in Mbarara, Western Uganda. Rwenzori Mineral Water Bottling Company is located in neighboring Seeta, Uganda Red Pepper Publishing Company: Their printing press is in neighboring Seeta, Uganda Namanve Railway Station is on the Uganda Railways System, administered by Rift Valley Railways Consortium. Warehousing in Namanve Currently, there is no company offering commercial warehousing space in Namanve. All companies currently situated, as noted above, are all in house, single brand companies. The area hence also lacks showroom facilities for the companies producing in this area. However, the areas near the same venue are at $9 per square metre in areas such as Nakawa, and Katwe (light industrial manufacturing areas). ………………………………………………. Author’s Profile-Ojijo Pascal Ojijo is the Founder & Lead at GoBigHub.com, a nonprofit founded to connect local entrepreneurs to local investors across cities in Africa. GoBigHub believes that the challenges that face Africa including poverty, disease, and low productivity, can be best solved by enabling scalable enterprises to access affordable capital and strategic business advise. We fill this gap through co-shared office space; platform for entrepreneurs to pitch their ideas to investment clubs; mentoring entrepreneurs to build effective business systems that can attract capital; and sensitizing investment clubs and cooperatives to consider private equity investment in SMEs as venture capitalists. GoBigHub is leading the move away from grants, promoting trade, not aid, with special focus on youth and women enterprises. Ojijo is privately a consultant in communications (public speaking, strategic planning, and writing); an expert lawyer specializing in ICT law, financial services law, law firm management, and legal rhetoric); a public speaker and coach on financial literacy and personal branding; and a consultant in collective investment schemes (investment companies, investment clubs, provident funds, and cooperatives). He also owns a software for cooperatives, a software for investment clubs, and a financial literacy board game, chapchap. Over a period of 9 years, Ojijo has worked with a broad scope of clientele including Ministry Of Foreign Affairs Cooperative; National Environmental Management Authority(Uganda); Kawanda National Agriculture Research Organization; Gender Ministry (Uganda); Nsamizi Institute(Mpigi-Uganda); 4Cs-Kenya; CREDO-Kenya; KHRC-Kenya; Foundation for Human Rights; Africa Youth Development Link; Technoserve; AIESEC; AYDL; UMYDF; CCEDU; FOWODE; PEDN; Foundation for Human Rights; over 20 investment clubs, over 50 individual clients, at least 15 cooperatives; and several other universities, companies, and individuals on various areas of expertise. He offers advisory support in legal and or strategic areas in various boards of various investment clubs, cooperatives, Bank of Uganda Financial Literacy Advisory Group, Uganda Financial Literacy Sharing Group (FLISG), and Competitiveness Secretariat of Uganda Ministry of Finance supported Investment Clubs Association of Uganda-ICAU. Ojijo is an author of 49 books; Inua Kijana Fellow; Performance Poet’ Armature Pianist; and entrepreneur owner of luopedia.com, commonsenseapp.net,  lawpronto.com, naniwapi.com, gobighub.com, allpublicspeakers.com,   uzimafoods.com, and achibela.com. M: +256776100059. E: ojijo@gobighub.com