Office Exodus: Offices Being pushed to Kampala Suburbs
Kampala

Office Exodus: Offices Being pushed to Kampala Suburbs


Social and economic factors pushing business offices to Kampala suburbs.

By Gideon Munaabi and Risdel Kasasira
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First published: January 4, 2006


As Kampala City grows tall and buildings like Workers House, Crested Towers, Communications House, Crane Chambers, IPS Building (Jubilee Insurance Center) give the city magnificent and fascinating places to do business in, many people/organizations are increasingly turning their eyes to the city suburbs. This trend is leaving a lot of office space in the city center.

According to a research conducted by Bageine and Company (an estates management firm) in 2001, over 250,000 square meters of office space in the buildings located in the city center was found to be unoccupied even at that time.

Sabiti Bageine, the firms Marketing Manager estimates that by the end of 2005, there could be around 300,000 square meters unoccupied. This means that the space is enough to accommodate over 10,000 offices of about 25 Sq meters each.

This beats the once strongly held belief by many people that the city center or the Central Business District is better suited for business, including housing offices, due to its easy accessibility to suppliers and users of goods and services, among other reasons.

Today, City suburbs like Ntinda, Kamwokya, Muyenga and Kololo have become the home of offices for many organizations and businesses, some of which (as our survey found out) are occupying the newly built or renovated residential-like premises for offices or sharing rent with other organizations.

As all this is happening, property moguls like Mukwano have chosen to invest their money in constructing shopping malls instead of building sky kissing towers to accommodate offices for the ever increasing business community. Instead his buildings are designed as shopping malls (he put two in 2005).

Related to this, some investors in the building industry are only reserving the top floors of their storied buildings for offices while the first floors are occupied by the growing boutique and other shop businesses.

For example in well known buildings that have office space like Kirumira Towers and Kizito Towers, one has to negotiate through the shopping malls to get to his or her office on the higher floors. This is not desirable to some business people intending to set up offices as directing clients to such offices is difficult.

Some down town streets like Nasser road and Nkrumah road, which would provide an alternative, have been painted with ugly pictures of criminal acts particularly forgery.

When you tell some people that your office is located on Nkrumah road, they have to think twice before giving you business. People think you may be involved in forgery, says Moses, a business consultant running his office on Kanjokya Street in Kamwokya.

Other business people with offices in the City center say that they are in the center because most of their clients are in the city but are quick to add that the environment in the Central Business District is not conducive for their business. Some say that in addition to being expensive, the city center lacks enough parking spaces and has a lot of noise. Property consultants Ultimate Media talked to agree.

For example, the rent for the office space in Class A and B buildings is between $10 (Sh. 20, 000) and $18 (Sh. 36, 000) per square meter per month within the city center, says an official from Knight Frank international Property Company, who did not want her name published.

Class A buildings include Workers House, Crested Towers, Communications House while class B buildings include Udyam House, Crusader House, Jumbo Plaza and Dewinton Road Offices, Crown Office, Commercial Plaza, Conrad Plaza among others.

Consequently, a tenant would be required to pay between $250 (Sh. 500, 000) and $450 (Sh. 900,000) per month for a space of 25 square Meter to have an office in these Class A and Class B buildings.

Getting office space at a place like Hotel Equatorial of about 4 square meters could cost you around $400 (about 800,000) per month, says Bernard Bigombe, the Marketing Manager, Jomayi Property Consultants.

Such prices may be too high for an average Ugandan intending to start or run a profitable business, when compared to the office space in buildings located in the City Suburbs where one can pay between $100 (Sh. 200,000) and $200 (Sh. 400,000) for the same size of space.

This may look small as compared to what is paid in the city center but landlords in the suburbs are turning their otherwise residential premises into rent able office space to meet the increasing demand and reap from the new exodus. Bigger houses have fallen suit.

For example the office space that includes a sitting room, dinning room and two (bed) rooms in Bugolobi, Muyenga, Mbuya or Naguru is between 1.1 and 1.3 million shillings per month (between $550 and $650), says Bigombe.

He says that the same house could be got at $250 (Sh. 500,000) in Ntinda, Mengo, Rubaga, Kibuli and Kamwokya when you want to use it as a residential house. He however says people end up turning them into offices.

Also, some landlords and property managers who prefer to charge the rent in US dollars worsen the high rates in the City. Just recently, traders were protesting the paying of rent in Dollars, saying it was making their businesses dwindle. But the Property managers say that it is a trend worldwide to charge in an international and stable currency and is not easy to change.

Worldwide, people like paying and being paid in stable and international currencies like the US dollar. The Uganda shilling keeps fluctuating. Expatriates and other foreigners also like paying in dollars because some of them operate dollar currency accounts, said the Knight Frank official.

She also says that although most of the offices in the City center are expensive and lack parking space, they do not require you to hire security and cleaning services. In the City center there is more security than that of offices in Kololo, Nakasero, Muyenga, Kamokya and Ntinda where a tenant needs to hire a guard and a cleaner, she says, adding that a landlord will in most cases provide the two services in the city center.

But what really should guide one in choosing whether to be in the city or suburbs?

The Choice is made by different individuals and depending on their clientele, she adds. Property experts also say that whether many organizations are relocating their offices to the suburbs, the issue of closeness or access to the City center remains the desire for many.

Offices in Kamyokya and Ntinda are on high demand because of their proximity to the City center. They are also big enough and the tenant pays less or the same amount they would have spent renting in the city center. This explains why many NGOs have their offices in these areas to benefit from the social-economic advantages of big space, less noise and closeness to the center, says Bigombe.

By Gideon Munaabi and Risdel Kasasira
more from author >>
First published: January 4, 2006
To learn more about Ultimate Media Consult go to www.ultimatemediaconsult.com.

Risdel Kasasira is a graduate Journalist who reports for Ultimate Media Consult. He has worked for The Daily Monitor, Radio Uganda and has done several communication related consultancies. He is also the Research Executive at Ultimate Media Consult (U) Ltd.

Gideon Munaabi is a journalist and public relations practitioner with Ultimate Media Consult (U) Ltd. He has been and continues writing widely for different publication locally and internationally. He is a founding member of Ultimate Media Consult (U) Ltd and is currently the chairman of the organisation.