Five reasons to invest in Uganda’s real estate market.

If you have money and want to invest in a safe asset that can provide consistently high returns, real estate properties in Uganda may be your answer. Local and international investors can benefit from opportunities to earn from commercial, residential, and industrial real estate. The top five reasons why these investments are attractive include the following;

1.      Growing population.

The Uganda Bureau of Statistics estimates the population growth rate at 3.0% annually. On a similar note, World Bank data estimates urban population growth in Uganda at a rate of 5.3 annually. For comparison, the urbanization rates of the United States of America and the United Kingdom are 0.6% and 0.2% respectively.

These data signify an enormous opportunity for investors to capitalize on the need for housing for the urban population in Uganda.

The housing deficit is currently estimated at 2.4 million units. This figure is projected to rise to 3 million by the year 2030. Most of this need is in the low-cost housing market, though a significant portion of the demand exists in the mid-to-high-end housing market.

Major cities like Kampala have experienced geographical expansion as people seek to acquire pieces of land to build houses on the outskirts. Many investors have benefited from purchasing undeveloped chunks of land, subdividing plots, and providing basic facilities that have attracted buyers. I predict this horizontal expansion will soon be accompanied by vertical expansion.

There will be increased demand for living spaces in multi-story apartment blocks for people seeking to stay closer to the city center. Office space and shopping centers will also experience a surge in demand due to the population increase. Real estate investors can benefit from this trend by investing in properties to fulfill this need.

2.      Economic growth

As the country enjoys an increase in Gross Domestic Product, the ability of residents to afford housing is increasing.

Major corporations have established a presence in Uganda, usually renting office space in the upscale parts of the cities and providing opportunities for their staff to afford to rent residential units in the surrounding neighborhoods. Similarly, the government has set up industrial parks to boost the country’s productive capacity, and this has created new jobs.

As people enjoy the benefits of these improvements, their purchasing power goes up, and so does their ability to purchase more living space.

The country’s economy will receive a further boost from the projected oil revenue that is set to be realized in the not-so-distant future. All this means that real estate investors in Uganda will have a ready market to consume their products.

3.      Enabling Government Policies

The government in Uganda has embarked on policies to encourage investment in the country.

A focus on infrastructure development such as road improvement and electricity transmission has opened up new frontiers for real estate development. It is now possible for developers to establish gated communities in areas outside the city center since there is access to services.

The government has also created an investor-friendly environment by streamlining administrative services like business registration to make the process easy. A new condominium property law has made fractional ownership of property possible, so investors have a wider market of people who can purchase their products.

There has also been political stability in the country, which has reduced overall investor risk.  

4.      Diversity of investment opportunities in real estate

Unlike other major investment vehicles, real estate, especially in Uganda, offers a diverse range of options for an investor to get started.

From affordable housing and middle-class residences to high-end condominium apartments, just the residential real estate sub-sector alone offers a variety of opportunities based on the investor’s preferred niche and investment goals.

A market exists for all sorts of commercial developments including shopping centers, office blocks, industrial buildings, and simple street-side shopping structures.

With few restrictions to development, investors can choose a sub-sector to focus on where they can build expertise and leverage skills to generate maximum profit. Such diversification opportunities also reduce the portfolio risk, ensuring that investors are protected from catastrophic events that could ruin their investments.

5.      Value Storage

Compared to other investments in Uganda like Unit trusts, government bonds, and treasury bills, real estate offers the best protection of capital in the inflationary environment. Properties can retain and gain more value even as the shilling weakens year after year. This advantage gives real estate an edge over the other alternatives of investment in a country.

Therefore, safeguarding capital is one of the main reasons to invest in Uganda’s real estate market.

To capitalize on the opportunities listed above, Baros Group Limited has developed products that make it easy for real estate investors to participate in Uganda’s real estate market.

We operate funds that pool together investor capital to undertake projects. We aim to help people make sound investment decisions, thereby increasing the likelihood of maximizing potential returns.

To learn more about investing in Uganda’s Real Estate industry, visit https://www.barosgroupltd.com/

About the author;

Benard Sonko is a real estate investment manager and founder of Baros Group Limited. For comments and inquiries, you can reach him at +256742140251 or info@barosgroupltd.com