UGANDA, Kampala | Real Muloodi News | According to the latest real estate market report published by Stanbic Properties Limited (SPL), Kampala City’s demand for office space surged by 4% in the second half of 2022.
The report, which was released March 22, 2023, provides insights into price changes, demand, and related variables for different real estate categories, including residential, retail, office, rental, and hospitality spaces across Kampala Metropolitan areas for the last six months of 2022 compared to the same period in 2021.
SPL’s Chief Executive, Spencer Sabiiti, reported that the Kampala office market witnessed a solid recovery in leasing activity for Grade A and B properties, representing the highest quality buildings with higher income tenants. The report found that approximately 12,000 m² of office space was taken up in H2 2022, a combination of expansionary, consolidation-led, and pent-up demand leasing, as occupiers began to realign their business strategies after a lengthy hiatus post-COVID-19.
The report notes that the emergence of a new trend of hybrid workplace strategies featuring a mix of on-site and remote working, with more focus on employee well-being, has tested a balance between personal and company preferences. However, the report found that rent for Grade C properties declined by 12.5% from USD 8/m²/month registered in December 2021, while those for Grade A and B quality space remained stable in H2 2022, recorded at USD 15 and USD 11/m²/month, respectively.
Sabiiti further stated that SPL anticipates office rents, particularly for Grade A, to remain on an upward trajectory in the next 12 months, backed by tight vacancy, robust demand, and limited new supply for rent. The report also highlighted the emergence of a nascent office market for Wakiso and Mukono, particularly on the upper floors of mixed-use buildings along arterial routes. However, the bulk of office supply in these nodes is suitable for small and medium enterprises, start-ups, and single-person occupiers. The weighted median rents for decent office space in buildings located along arterial routes out of Kampala stagnated at UGX 25,000/m²/month as of December 2022, except for Mukono Municipality, which registered a 12.5% annual increase, up from UGX 20,000/m²/month recorded for the same period in 2021.
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