Knight Frank says Kampala housing sector grew in last half of 2023

In the last six months of 2023, the housing sector preformed well, recording minimal increments in rent for a two and three bedroomed apartment in Kampala and high occupancy rates, a report from property management firm, Knight Frank has revealed.

The report attributes the performance to the development of prime apartment units that offer larger living spaces and better amenities thus commanding higher rates.

“Expatriate staff unable to find stand-alone houses for occupation within their rental budget or alternatively those who prefer community living are opting for apartments thus contributing to the rise in occupancy levels,” the report notes.

The report revealed that demand for prime office space persisted with prime rents recorded at $16.5 and $ 15.0 per square metre per month for Grade A and Grade AB, respectively, representing a 10% rental increase for Grade A and 12% surge for Grade AB as compared to H2 2022 rental levels.

The retail sector registered growth in the same period as measured by turnover, occupancy, and footfall performance, the firm said.

On an annual basis, footfall figures decreased by 5% while turnovers from general retail recorded a 14% increase with average occupancies increasing by 3.79% across Knight Frank-managed malls.

The report notes that the healthy performance was on account of promotions during the period under review which included Black Friday promotions and the Festive Season sales in select stores.

The report noted that demand for industrial space was hinged on business growth and improved economic environment with the highest demand recorded for space sizes ranging from 300-1000 sqm and a decline in demand for spaces ranging over 1000sqm.

“Consumers in general have been plagued by rising energy prices, which has also been reflected in the pump prices in and around Kampala. Commercial lending rates on shilling denominated loans registered a 0.49% year-on-year increment to 18.90% in October 2023,” the report noted.

If the inflation rate remains within the 5% target, the property management firm predicts that demand will persist for apartment units for sale within a price range of $150,000 to $200,000 in the prime and semi-prime areas (a radius of 10-12 km from the city centre).