Commercial Real Estate Opportunities in Uganda

Commercial Real Estate Opportunities in Uganda

Have you noticed the surge in retail activity across Uganda? From the growing number of strip malls to trendy corner shops, commercial real estate is experiencing a boom. This isn't just a coincidence - it's a reflection of a thriving economy and a prime opportunity for investors seeking high returns.

The retail sector was a star performer in 2023, as it outpaced expectations with rising consumer confidence, increased wages driving consumer spending, and a return to rental growth. This translated into lucrative income opportunities for investors. Knight Frank's 2023 Q4 review highlighted the retail sector's impressive income returns, reaching 7.0% in the year to December 2023. This surpasses other major commercial real estate sectors like offices (5.5%) and industrial (4.9%).

Beyond Retail: Warehouses, Hospitality, and Mixed-Use Developments

The commercial real estate landscape extends beyond retail. Here are some additional sectors with exciting potential:

• Industrial Properties: The rise of e-commerce giants like Amazon and Jumia is creating a demand for warehouse space. This "fight" between physical stores and online stores is influencing industrial space prices in Uganda, just like in more developed markets. Investing in warehouses can offer stable income and low vacancy rates.
• Hospitality Sector: Uganda's tourism industry is flourishing, fueled by the growing popularity of short-term rental options like Airbnb. Hotels and serviced apartments catering to tourists and business travelers can provide significant returns, especially in prime tourist destinations.
• Mixed-Use Developments: Diversification is key in real estate. Mixed-use developments, combining residential, commercial, and recreational spaces in a single project, are gaining traction. We can see these already in the downtown area with arcades and shops on the ground floor, warehouses in the basement, and apartments or restaurants above. This offers investors a hedged portfolio with diverse income streams.

The Rise of Arcades: An Arcade for Every Corner

Arcades, multi-story buildings housing a variety of shops and businesses, are rapidly becoming a familiar sight across Kampala’s major roads. This surge is driven by the increasing number of vendors seeking well-positioned, affordable commercial space. For investors, arcades offer the potential for high tenant density and a steady stream of rental income.

By exploring these diverse commercial real estate opportunities, investors can capitalize on Uganda's thriving market, diversify their portfolios, and achieve strong returns. So, are you ready to unlock your share of the commercial real estate boom?