For any investor, it is very important to understand the landscape of the market, to know your potential areas of investment. This is because the premise of investment is most of the time a long-term relationship that you enter, with the thing you buy and the place you buy it. And for us, we speak the language of real estate investment. For every real estate market, there always is the question of the viability of the area of investment, its potential. We are here to answer that for Uganda.
Over the past few years until now, Uganda is steadily gaining recognition as one of the most prominent markets on the continent to invest in, especially in real estate. People that are paying attention can realize that with the steady growth of its economy, a youthful workforce coupled with the fact that it is strategically located, Uganda is catching the eye of both local and international investors. Taking a look at other emerging markets that are either being crippled by economic stagnation or political instability, Uganda seems to be unbothered and continues to make steady progress in its economic reforms, infrastructure development, and regional integration—giving investors so much hope for both a present start and a reliable future for investment.
Furthermore, in recent years, international and major publications have had their radars on Uganda’s investment potential, all with remarkable reviews. The World Bank in 2023 reported that despite global disruptions, Uganda’s GDP was steadily growing over the last decade, with an average rate of 5.5%. Such growth demonstrates a thriving domestic economy with sectors like real estate, energy, and technology expanding at remarkable and unprecedented rates—hence attracting FDI.
Steady Growth with an optimistic future.
Everybody knows that the promise of the future of an investment landscape is economic resilience – country’s ability to anticipate, prepare for, respond to, and recover from economic shocks while minimizing long-term damage to its economy and maintaining or improving its overall growth trajectory. Over the past 10 years, especially during the times global markets faced instability, reports showed that the Ugandan economic landscape was doing the opposite – it was flourishing. Even more, ADB predicts that this pattern is set to get even better, and the growth is projected to accelerate with the GDP expected to hit 6.5% by 2025.
This resilience is not by mistake. The Ugandan government, through structural reforms like improving fiscal policies, has been part of the many reasons fueling this growth. Efforts like this foster long-term demand for better housing spaces by the years. A growing middle and upper class is propagated in such atmospheres, which means more disposable income creating a market ready to embrace new developments.
And perhaps the biggest boost lies right within the people. UNICEF states that Uganda has one of the youngest populations in the world, with 75% of the population under the age of 30. Knowing this, the government is investing heavily in vocational education and skilling – which in turn reflects a ripe environment for growth in multiple industries. This ensures that the workforce in the country is ready not only to develop more modern real estate infrastructure but even to drive demand for residential housing in the near and far future. This demographic advantage is definitely one of Uganda’s most valuable assets for investors looking to tap into long-term growth.
Strategic positioning as a regional growth hub
With the previous economic resilience, this has just pushed almost all investment opportunities to grow faster – starting with the most trusted – real estate. Real estate in Uganda has proved to be growing at an impressive pace – with Kampala, its capital city, leading on this frontier. According to Knight Frank’s 2023 Africa report, the real estate market in Uganda has been expanding by approximately 5% annually, driven by urbanization and the sprouting middle class causing a remarkable increase in demand for more modern housing spaces.
Kampala’s upscale neighborhoods of Kololo, Nakasero, and Naguru have emerged as the most in demand, especially for residential properties for investment – especially due to the solid returns on investment from a solid 8% up to figures as high as 22% – even in economically uncertain times. The young professionals and expatriates, who happen to be the most concentrated demographic in this area, are particularly attracted by the emerging off-plan projects—particularly luxury apartments and modern living spaces.
And with luxury apartments and homes gaining traction right in the center, more affordable yet modern housing projects are being scrambled for by the middle-income earners in need of quality homes around the city centers they work in.
For investors, this is a dual opportunity based on the amount available to invest and the preference of units for investment.
A Thriving Real Estate market with high investment returns
A resilient economy deserves the strongest of sectors to put your money. And that’s what real estate has proven to be with Uganda. The property development sector has been commended, having contributed 9.8% of the national GDP, according to a 2022 report by the Uganda Bureau of Statistics. And this is a figure expected to rise as urbanization of its cities continues and infrastructure expands.
Multiple other studies affirm the same consensus. Stanbic Bank, Uganda’s largest bank by deposits, noted that real estate has consistently outperformed traditional savings and equities – proving to be one of the country’s most resilient investment sectors. An even more interesting finding from the study was that whether it is commercial or residential, the returns on investment yielded are stable even in challenging economic times.
Knowing this, real estate is one of the most assured places where not only are you sure that your investment is secure, but you are also sure that with the blossoming economy, investing now gives you early access to a world of potential and returns on investment.
Infrastructure development: Building for the future.
The Ugandan government realizes the potential for the growth of the real estate sector, recognizes its critical role in economic growth, and in various ways has chosen to invest in it, starting with infrastructure.
Developments like the Entebbe Express Highway, the Northern Bypass, and the Queensway within Kampala have made hard-to-reach areas more accessible and have opened new opportunities for residential developments in areas that were once barely reachable and not considered for investment potential. Future prospective arrangements like the Kampala-Jinja Expressway further demonstrate the government’s intention to support and empower real estate investors to thrive.
Policies designed to attract real estate investors
In the area of investment, we, as developers and investors, have things we have control over and things we don’t. This belongs in the latter. Governments have been given the onus to regulate the readiness of the market for investment. Many times, we would want to ask ourselves, how do certain governments feel about real estate? Policies are the language that governments speak to show whether they are in favor of the real estate market or not.
The Ugandan government has been clear about its stance in this regard. It has demonstrated so by introducing long-term leases for non-citizens, tax holidays, and exemptions on import duties for construction materials, which are just a few of the incentives designed to attract capital into the sector.
Their implementation of the Uganda Investment Authority to guide investors through the processes involved ensures that whoever is in the pipeline to invest knows that the process is secure and runs smoothly, with minimal red tape and hesitation. Finally, having a transparent property registration process that the government champions and implements makes it an excellent environment for international investors.
Opportunities in luxury, mid-use and affordable housing
The best investment climates are often those that are able to level the field. What does this mean? Unlike places that favor a certain monetary demographic of the population to thrive, the Ugandan real estate market is one that has well understood the needs of its audience and is catering to them in a more than pleasing way.
Prime neighborhoods in Kampala, which have become hubs populated with modern and luxury developments, are particularly lucrative, evidenced by the high demand for the more costly apartment and office spaces. Projects like Cadenza Residences, Uganda’s Tallest Residential Tower, have clearly demonstrated the country’s ambition to meet global standards in the property development space.
Meanwhile, the portion of the market filled with young professionals who value convenience – representing a large extent of Uganda’s young population – seems to flood the mixed-use projects that combine residential, commercial, and retail spaces. Such affordable housing presents significant potential, looking at the exaggerated demand of Uganda’s urban workforce, which the government has clearly emphasized.
As clearly evidenced by all these factors and even more, Uganda is at the brink of a real estate revolution, and these are the rumblings of the first shakings. The country presents itself as a compelling mix of great opportunity and growth. And as the young population continues to urbanize, the demand for all kinds of properties across all segments will only increase. The plethora of unique combinations mentioned presents a favorable and lucrative environment for long-term investments.
For anyone ready to invest, a country like Uganda offers more than just solid returns – you get a unique opportunity to contribute to a national transformation and write its history by owning monumental pieces of it during its bustling growth phase.