City office landlords looking at a bleak future unless they innovate

By Denis Jjuuko

Two or so weeks ago, an advert was placed in the newspapers calling for anybody who could buy Course View Towers — an office building with many floors along the Yusuf Lule Road. The seller was a financial institution who is owed money by the owners of one of the ritziest office buildings by Kampala standards. Some of the companies that once occupied this building have since vacated to other ‘towers’. Probably they didn’t want to be inconvenienced by realtors.

It will not be an easy sale unless it is bought for self-actualization purposes. The real estate sector in Kampala has contracted. There are more people selling than buying and it has been a buyer’s market since around 2012. Although it is the right time generally to buy because properties are cheap now, it only makes sense if you are using savings or you are a government agency. If you bought a building like Course View Towers to rent it out to make money, pay the mortgage and all that, you could be looking at spending more time in bank boardrooms negotiating debt repayment plans than collecting rent.

You will be amazed by the number of empty buildings around Nakasero — once the most exclusive area for Uganda’s blue-chip companies. Government agencies have either left rented buildings or are busy constructing. There are government towers coming up along Lumumba Avenue, Nakasero Road and somewhere in Kololo near City High. One telecom company has returned the building it has been renting to its owners and moved into a former factory near Meat Packers. Office landlords are looking at a bleak future. I predict more foreclosures as government ministries and agencies leave.

Kampala isn’t the first city to face such challenges. In many cities, buildings become empty due mainly to development or changes in lifestyles. A mall can become empty if the neighbourhood becomes slummy or if a road is constructed that diverts traffic. As Kampala expands, there will be more and more people preferring to work near where they live than driving for four hours everyday.

Landlords in order to pay off huge loans borrowed to construct these buildings charged premium rates in US Dollars to a small percentage of companies that could afford. For many years, it has not been uncommon to find empty spaces in these buildings. Either you paid many dollars per square metre or the building was left empty.

However, not all is lost. Landlords must become creative and think less of office space. For example, Uganda is a poor country and like in all poor economies, there are many people who believe in miracles. So why not turn some of these floors into churches? Instead of prophets using empty spaces around Kampala or preaching in bars, they could start turning entire floors into churches. They will just need to sound proof the rooms so that there isn’t so much noise.

Alternatively, these office buildings could become hotels and/or conference facilities. The ministry and government agencies aren’t about to start building their own hotels. And since they need workshops for every little thing, hotels and facilities might be a good option — until government decides to build their own hotels and perhaps by that time, landlords would have got their money back.

I have previously argued that Kampala office buildings need to be turned into residential apartments and a campaign to decongest Kampala is initiated to encourage people get out of the suburbs and live in Kampala. This would reduce the need for motorized transport for city workers as they could walk to work everyday. But this can only happen if there is a sustained campaign to decongest the city and make Ugandans believe that there is nothing wrong in living in an apartment in a high-rise like Course View.

In the cities Ugandans love visiting in the western world, a lot of rich people live in skyscrapers. So a campaign using such examples would be easy to do since most Ugandans unconsciously are promoters of cultural imperialism, which partly posits that due to the dominance of the western media, people around the world easily dispense with their traditions in favour of western cultures since they are presented as modern. Living in a tower in the central business district is one of them. Hospitals, museums, entertainment centres, health clubs, and universities could be alternatives.

The writer is a Communication and Visibility Consultant. djjuuko@gmail.com

*Internet photo of Course View Towers which has been put on sale by a financial institution.