Experts have said that the Coronavirus pandemic has had a big impact on the real estate sector in the past one year which among others left office and residential property empty.
The 2020 Kampala market review and the 2021 outlook released by Knight Frank Uganda on Wednesday indicated that despite beginning on a higher note , the office sector saw a drastic fall with a decline in the number of leasing inquiries since most businesses were not operations due to the pandemic effects like the lockdown.
“A major trend observed was a renewed focus on health and wellbeing of office occupiers be it staff and tenants. When the lockdown was initially lifted in June 2020, the reality of having to rethink ways of supporting business continuity while keeping the workforce safe was a priority for many landlords and corporate organisations,”said Judy Rugasira Kyanda, the Managing Director Knight Frank Uganda during the launch of the report.
Rugasira explained that now, many employers and employees have now realized that they can work effectively from home, away from office and consequently they see it meaningless to continue renting office space they are not going to use.
The real estate expert noted that several occupancy strategies like social distancing between desks in office and the requirement of few numbers have seen the demand for office space go down since the outbreak of the pandemic.
Similarly, the report says several organisations were forced to rethink their business strategies so as to remain afloat as a result of the Covid-19 pandemic including downsizing on office space requirements, relocations, lease reviews and postponing occupancy plans among others.
“Knight Frank registered a 6% year on year increase in vacancies for prime commercial office space. This was as a result of downsizing of office space requirements, relocations, lease reviews, renegotiations and postponing occupancy plans among others,”Rugasira said.
According to report, the rate at which office space is being occupied reduced by 6% and among the areas affected included Kololo, Nakasero, Lugogo bypass, Naguru, Mbuya, Bugolobi, Luzira, Muyenga and Ntinda.
According to the report, the Coronavirus pandemic and its effects like the lockdown changed the meaning of homes as many homes became schools, offices, churches and stores among others since people were forced into confinement and self-isolation.
“This led to a rethink by many occupiers on the type of home they want and provoked questions and decisions between owning or renting apartments or detached houses and the importance of green space for families, “the report indicated.
Consequently, many people left their residential to either rent or their own property to suit in the new normal and consequently left many landlords in unchartered waters.
“Both parties(landlords and tenants) were forced to renegotiate their terms , from rent discounts to deferrals in a rapid sequence of events over a short period of time. In the first quarter of the year, many foreign nationals and expatriates who form a large part of the tenant market repatriated to their home countries at the announcement of the lockdown.”
The report however said that with the easing of the lockdown and with hopes of a vaccine, the situation may gradually improve.