Drop: A URA directive has forced a drop in goods that are allowed into warehouses. FILE PHOTO
A
directive by Uganda Revenue Authority (URA) to limit some products from
custom warehousing at post of entry forced a drop in warehouse leasing
activity during the second half of 2019, according to a Knight Frank
report.
According to report, the retail segment of real estate saw varied activity during the period, mainly impacted by statutory directives.
During the period URA issued a list of goods that could no longer be eligible for customs warehousing at the point of entry.
The net effect of this, according to the report, meant that traders would have to import goods, clear taxes immediately and then transport them to the final destination.
“The change in operations will no longer allow traders to keep certain items in bonded warehouses,” the report reads in part.
Some of the list of goods included sugar, rice, wines and spirits, building materials, motor vehicle tyres and tubes, motor vehicles older than 14 years, among others.
Data from URA indicates that used car imports in the year ended 2019 declined by 12.8 per cent mainly due to a ban on cars older than 15 years.
Only 42,681 units were imported in 2019 compared to 48,966 units in 2018.
The real estate report also noted that the move will have a direct impact on the warehousing sector, especially bonded warehouses since the items mentioned will become obsolete.
However, activity in malls managed by Knight Frank increased with expansions and debut of new entrants.
Planned developments, such as Metroplex Mall under redevelopment and Arena Mall which are being done on a pre-let basis to ensure less risk for developers and conducive retail space for retailers are at more than 50 per cent and 60 per cent, respectively.
According to report, the retail segment of real estate saw varied activity during the period, mainly impacted by statutory directives.
During the period URA issued a list of goods that could no longer be eligible for customs warehousing at the point of entry.
The net effect of this, according to the report, meant that traders would have to import goods, clear taxes immediately and then transport them to the final destination.
“The change in operations will no longer allow traders to keep certain items in bonded warehouses,” the report reads in part.
Some of the list of goods included sugar, rice, wines and spirits, building materials, motor vehicle tyres and tubes, motor vehicles older than 14 years, among others.
Data from URA indicates that used car imports in the year ended 2019 declined by 12.8 per cent mainly due to a ban on cars older than 15 years.
Only 42,681 units were imported in 2019 compared to 48,966 units in 2018.
The real estate report also noted that the move will have a direct impact on the warehousing sector, especially bonded warehouses since the items mentioned will become obsolete.
However, activity in malls managed by Knight Frank increased with expansions and debut of new entrants.
Planned developments, such as Metroplex Mall under redevelopment and Arena Mall which are being done on a pre-let basis to ensure less risk for developers and conducive retail space for retailers are at more than 50 per cent and 60 per cent, respectively.
Residential
The real estate sector also saw an increase in supply of apartment units in prime residential units in areas of Kololo, Nakasero and Naguru.
This, as a result, caused a 9 per cent year-on-year decline in occupancy rates, forcing a discount in rent charged by some landlords to stay competitive.
Additionally, the report highlighted an increase in enquiries for two-bed apartment units by single expatriates and young couples.
The real estate sector also saw an increase in supply of apartment units in prime residential units in areas of Kololo, Nakasero and Naguru.
This, as a result, caused a 9 per cent year-on-year decline in occupancy rates, forcing a discount in rent charged by some landlords to stay competitive.
Additionally, the report highlighted an increase in enquiries for two-bed apartment units by single expatriates and young couples.
Office
Knight Frank also registered a 3 per cent year-on-year decline in occupancy rates for prime office space (Grade A and B+).
The decline was attributed to reduced demand by large space occupiers particularly multi-nationals and large corporates.
In the same period, there was also an addition of approximately 18,000 square metres of prime office space, of which, 20 per cent was absorbed during the second half of 2019.
The biggest percentage of office space was leased to government funded projects in the road sector, start-ups particularly ICT and insurance firms accounting for 40 per cent, 20 per cent and 15 per cent of the leased space respectively.
Knight Frank also registered a 3 per cent year-on-year decline in occupancy rates for prime office space (Grade A and B+).
The decline was attributed to reduced demand by large space occupiers particularly multi-nationals and large corporates.
In the same period, there was also an addition of approximately 18,000 square metres of prime office space, of which, 20 per cent was absorbed during the second half of 2019.
The biggest percentage of office space was leased to government funded projects in the road sector, start-ups particularly ICT and insurance firms accounting for 40 per cent, 20 per cent and 15 per cent of the leased space respectively.
Increase in residential propertis
More apartments were built last year in the upscale suburbs of Kampala but owners found it tougher to attract tenants.
The Knight Frank report indicates there was at least an 8.5 per cent increase in the supply of apartment units. The biggest increment, the report notes, was in the prime residential areas of Kololo, Nakasero and Naguru.
More apartments were built last year in the upscale suburbs of Kampala but owners found it tougher to attract tenants.
The Knight Frank report indicates there was at least an 8.5 per cent increase in the supply of apartment units. The biggest increment, the report notes, was in the prime residential areas of Kololo, Nakasero and Naguru.
However much as more apartments were constructed, fewer people and companies are able to afford them.
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