Oil and gas driving demand for rental properties up

Kampala, Uganda | THE INDEPENDENT | Uganda’s property market is experiencing an increase in demand riding on the oil and gas development. The Independent caught up with Moses Lutalo, the managing director at Broll Uganda Ltd, a property management firm, for an interview on the developments in the rental space segment.

What is your assessment of the demand for rental space for different properties in Uganda at the moment?

Different asset classes of properties are responding differently to the current macroeconomic environment but what is common to almost all is the role commercialization of oil and gas is playing in driving demand. For prime office space, the demand has gone up, for prime retail space the demand has remained flat, for prime residential housing the demand has gone up and this is the same trend for prime industrial space where demand has also gone up. Even for none traditional asset classes like student accommodation, data centres and health care, the demand has picked up compared to the same period last year.

Kampala is currently experiencing a surge in demand for virtual office space. How prepared is Broll Uganda to deal with this new competition?

Broll is not in competition with virtue office space providers since we are a real estate consultancy company. We see this “surge” in demand as an opportunity for Broll to attract more players to invest in this offering for the betterment of the sector.

How is Broll’s performance since its entry into the Ugandan market? What have been the key reasons behind the performance?

Broll performance in the market so far has been impressive from a one-man show in 2017 to now over 40 staff. We have grown our offering from one service line – occupier services to Property management, facilities management, broking, project management, and most recently Valuation & Advisory, a fact that makes us a full-suite real estate advisory firm in Uganda. There are several reasons for this performance. We operate as one company at a group level and we are able to benefit from economies of scale thus being very competitive in the market. We have also adopted an agile working style underpinned by a robust technology platform Broll on Line.

Numerous real estate reports have indicated that tenants are shifting from CBD to the Kampala suburbs. Is this what you see from your end? What do you make of this in your opinion?

The aftermath of COVID-19 ushered in new ways of doing business, especially for retail that saw more appreciation of e-commerce and the need to shop from our neighbourhoods having done so during the lockdown. With this in mind, many traders have now opted out of the expensive downtown retail development into the suburbs where the rent is far cheaper and enhance their e-commerce capabilities.

This trade is likely to continue especially for the nonexperiential developments like downtown arcades and we are likely to see more depressed rental levels in this segment. However, the mainstream retail rentals in well-planned developments and managed shopping centres, the rent is likely to remain at the current levels in the medium to long term.

How does Broll prioritize tenant satisfaction and retention in a competitive market?

Broll’s approach to tenant satisfaction and retention involves an automated system that tracks the entire process from query submission to resolution, eliminating human errors and providing accurate feedback. The company also conducts quarterly surveys to assess tenant satisfaction with various aspects of property management and uses a fault centre to monitor queries and identify challenges in real time. Broll treats all tenants equally and provides the same quality of service, which enhances retention rates. These unique strategies set Broll apart in the market.

What is your projection of demand for different rental properties in the next six months?

All factors held constant, demand for prime office space will continue to grow as occupiers seek better office buildings in better locations. For prime retail space, the demand will remain flat, for prime residential housing the demand will continue to pick up as more work permits are issued to the oil and gas expert workforce. For prime industrial space, the demand is likely to hold at its current levels. We are likely to see more demand for none traditional asset classes like student accommodation, data centres and health care.