This time for Africa – why are property investors so excited about Kampala?
- Uganda one of the ‘last frontiers’ for property investment
- Investors leading the field in changing attitudes towards Africa
- Kampala residential property shortfall capturing global attention
To coincide with the much-anticipated launch of a brand new collection of luxury apartments in the Ugandan capital, Kampala, the CEO of Property Frontiers, Ray Withers, interviewed Clive Kefford, CEO of ProAfCo, developer of Jakana Heights, to get his views on why investing in Uganda is an exciting and lucrative opportunity right now.
Ray: So, Uganda. That is very much an emerging property market. Do you think international investors are ready to explore such an opportunity?
Clive: Professional institutional investors already have a huge appetite for investment in Africa because it provides opportunities and returns that are hard to find in other parts of the world. The difficulty is sourcing investments that are packaged up with the due diligence and research required. Individual investors are also beginning to understand this Africa is on the brink of being seen as the latest and smartest new place to invest.
Ray: Why Africa? Why now?
Clive: The biggest single change has been the huge reduction in armed conflict across the continent. There have been long periods of peace and stability in many countries in Africa and this has allowed good economic policies to be implemented and businesses to grow and operate much more easily and successfully.
Ray: What do you think is the most common misconception people have when thinking about Africa and Uganda?
Clive: The image most people have of Africa is of war, famine and disease and this because most of the news we see is about these issues but this is very unfair. If every report from the US was filmed in an area run by drug gangs or a in a housing project with no employment, we would have a similar negative impression of the States. Our image of Africa has become very distorted. Problems do exist in Africa but they are far from the whole story: most people’s lives are largely unaffected by these issues and professional people I know in Kampala have a lifestyle that I would say is better than most developed countries.
Ray: Do you feel that attitudes towards investment in Africa are changing?
Clive: Attitudes are certainly changing as the African economies grow and they start to become more integrated at a global level. Investors are leading the way because they cannot afford to have inaccurate information and as they invest more and more, a truer picture of Africa will start to become known.
Ray: What made you feel that there was a residential property opportunity in Kampala?
Clive: Uganda’s population is growing faster than any other country’s in the region and this has created enormous demand for housing. At the same time the economy has been growing at over 5% per annum for 30 years so people are getting wealthier and more people can afford to buy homes.
Kampala is the biggest city and has the most developed markets. Its population is growing faster than anywhere in the country due to increasing urbanisation. It is also an extremely attractive city to live in. It is very safe, has an ideal climate and the people are extremely friendly.
Ray: What is the current state of housing in Kampala?
Clive: Interest rates have recently increased in the run up to the election and in the middle income housing market many people are waiting for the economy to return to normal next year before buying. However, for top end properties such as Jakana Heights, the money invested into the economy before elections is likely to increase purchases.
The rental market at the luxury end has been affected by the slowdown in oil exploration however this will pick up in 2018 when oil production starts and a new set of expatriate workers will need to find quality accommodation.
Ray: How do you think the city’s housing market will look by 2030?
Clive: By 2030 I expect more international and institutional buyers to be investing in the housing market to meet the demand. Currently most developers and investors are from Africa and are just now beginning to come from the Middle East. As the institutional investors from Europe and America start to play a large part, the market will begin to mature.
Ray: Talk us through the key appeals of your new development, Jakana Heights
Clive: The site for Jakana Heights determined everything about the development. It is a large plot right on top of a hill overlooking Lake Victoria. It is a quiet peaceful place away from the hustle and bustle of the busy city. The site was only suitable for luxury development and we have made sure that the design, quality of build and finishing are all up to the same standard as the location.
The apartments are spaciously designed and most have great views. There is a swimming pool, saunas and steam rooms, a gym, bar and clubhouse for relaxation. There are also meeting rooms that can be hired for business and shops to provide the essentials so that almost everything you need is catered for you on site.
Ray: Why is the development a great investment choice?
Clive: Jakana Heights is a great investment choice because the yield on the properties is so high. Yields in Kampala on quality residential properties are generally very good at 10% but Jakana Heights is offering much higher returns than this, suggesting that the price will rise significantly during construction. Yields are in the region of 15% NET and the purchase price is from just $80,000 USD. This means that investors can make a great return whether they sell on completion or hold on and let it out.
For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.