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Uganda housing shortage to continue

(KAMPALA) The demand for office space and quality residential accommodation will continue unabated in Kampala, the capital of Uganda, fuelled by a rising middle class and offshore interest and increased investments, a global property firm has predicted.

Britain-based Knight Frank’s Africa Report 2007, launched recently, said Kampala was short of office, retail, industrial and accommodation space as demand continues to outstrip supply. The report also provides a comprehensive look at the property environment in Africa.

‘Demand for office space has also increased from telecom companies and other related services,’ said the report, quoted by New Vision daily yesterday.

Kampala’s property market is attracting interest from abroad with offshore investors hoping to cash in on the rental yields that are higher in the region at 9 per cent for a 100 sq m apartment compared to Kenya’s 7 per cent and Tanzania’s 8 per cent.

Knight Frank said office prime rent fetches US$16 per sq m per month with a yield of 11 per cent, while a four-bedroom house in a prime location brings in US$5,000 in rent per month – a return on investment of 8 per cent.

Based on high rental yields on property in Kampala and across the region, Rutley Capital, a private equity arm of Knight Frank, has launched a fund to invest in east and southern African properties.

 

Source: Xinhua (Business Times 23 Oct 07)

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