UGANDA, Kampala | Real Muloodi News | Oil production in Uganda is anticipated to push Kampala’s prime rent up.
President Yoweri Museveni and Samia Hassan, the President of Tanzania, signed an agreement in Kampala in April this year. The agreement proposed the construction of a 1,440 km crude oil pipeline from Uganda’s Albertine region to Tanzania’s seaport of Tanga in preparation for oil production in 2024/25.
As a result of the oil deal, there has been a surge in occupier demand across several sectors, mainly the agricultural, food and beverage industries in Uganda. The demand set off an increase of 8% quarter-on-quarter rental rates to USD 15 per square metre. Overall, office occupancy rates increased by 3.4% during the period under review, despite the COVID-19 pandemic.
Tilda Mwai Knight Frank, Researcher for Africa, said, “Locations such as Kampala anticipate a record increase in occupier activity. The increase in occupancy is due to the recent signing of the East African crude oil pipeline project which we expect will drive up demand from the oil production sector in particular.”
He goes on to say: “Positively, as the global vaccination rate has increased and, with some lockdown measures improving, we are seeing multinational occupiers looking to re-occupy their spaces and relook at their strategies which, in turn, is leading to increased market activity.”
The latest Petroleum Authority of Uganda data reveals the number of local housing units taken up by oil and gas industry players increased from 40 last year, to 200 by end of March 2021; a sign of renewed housing demand, business opportunities for property owners and better returns on investment.
Uganda’s hopes are high over the potential for oil exports to lift the East African country into upper middle-income status by 2040. Annual per capita income in Uganda was less than $800 in 2019.
Robert Kasande, permanent secretary with Uganda’s Ministry of Energy and Mineral Development, said “We believe that this should be a catalyst for economic growth.”
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