UGANDA, Kampala | Real Muloodi News | Investing in research is crucial for informed decision-making in the real estate sector, where trends are not always obvious.
However, experts in Uganda have noted a significant lack of research and feasibility studies among property developers, leading to the construction of structures that fail to appeal to the right market.
Spencer Oyes Sabiiti, the Chief Executive of Stanbic Properties Limited (SPL), emphasised the reluctance of developers in Uganda to invest in research. This has resulted in a high number of property auctions and stalled projects.
Erecting condominium apartments in the wrong area is a common mistake made by developers who fail to conduct proper feasibility studies. Sabiiti highlighted the need for research to provide professional insights and address the knowledge gaps prevalent in the real estate sector.
One of the contributing factors to this issue is the lack of knowledge about the physical planning development structure.
Unlike countries like Rwanda and Kenya, Uganda lacks zoning regulations that guide developers on the appropriate structures and locations for construction projects.
Closing this knowledge gap and implementing effective planning interventions are essential for the growth and success of the real estate industry.
Statistics from Stanbic Properties show a concerning increase in foreclosures, with over 2,000 properties advertised for sale in the first half of 2022. This figure is nearly double the number advertised during the same period in 2019.
The trend indicates that borrowers are losing significant assets, including family homes acquired through a lifetime of savings.
The SPL report also reveals a decline in rent for Grade C properties, dropping by 12.5% in December 2021.
In contrast, rents for Grade A and B properties remained stable in the second half of 2022. The demand for Grade A office spaces is expected to continue rising due to limited supply and robust demand, leading to an upward trajectory in rental prices.
Athan Mukama, the projects manager, highlights a proportional decline of 12% in properties located in the suburbs, particularly Grade C properties.
The rise in demand for Grade A and B properties is attributed to strategic demands and the competition faced by Grade C properties from new infrastructure developments, such as road construction in the suburbs.
The government has played a significant role in improving infrastructure around Kampala, including road networks in the suburbs.
Infrastructure development projects, like the Entebbe express highway and the northern bypass, have opened up areas like Naalya, Namugongo, and their surroundings for further development.
Investors must conduct thorough research on such infrastructure projects before making real estate investments.
By understanding market trends, planning regulations, and infrastructure developments, investors can mitigate risks and maximise their chances of success in the real estate market.
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