2026-08-16-莱坊-Kampala_Property_Market_Performance_Review_H1_2026_20页_4mb

Kampala Property Market Performance Review - H1 2026

Core Content Summary

Kampala's property market in the first half of 2026 experienced mixed performance across sectors, shaped by both domestic and external factors. The economy showed solid momentum, with GDP growth projected at 6.4% for FY2025/26, driven by private-sector expansion, agricultural productivity, and oil-related activity. However, external shocks, particularly the Middle East conflict, led to increased oil prices, fuel-driven inflation, and a weaker shilling, which affected the market dynamics.

Main Points

Economic Context

• GDP Growth: Uganda's economy grew at 6.4% in FY2025/26, with 17 consecutive months of private-sector expansion.
• Inflation: Inflation remained low, with headline inflation at 3.7% by June, the highest since September 2025, but still below regional averages.
• Monetary Policy: The Bank of Uganda kept the Central Bank Rate (CBR) at 9.75% but increased the Cash Reserve Requirement (CRR) to 11.0% to absorb liquidity and support property demand.
• Exchange Rates: The shilling depreciated by 2.8% year-on-year, but remained relatively resilient compared to other African currencies.

Market Performance

• Residential Market:

  • Market remained buyer and tenant-friendly with low enquiry levels and extended transaction times.
  • Prime rents rose slightly (2-bed +1.7%, 3-bed +0.6%), but the gains were technical and not demand-driven.
  • Occupancy improved to 84%, driven by realistic pricing and absorption of new supply.
  • Demand shifted from expatriates to Ugandan nationals, with more short-term furnished lets.
  • Developers introduced flexible payment structures, including rent-to-own products, to address affordability issues.

• Office Market:

  • Performance was defined by recovering confidence and new supply.
  • Grade A rents increased to $17.00 per sqm, with 87% occupancy, while Grade AB rents softened to $14.00 per sqm.
  • Parking became a key requirement, not just a preference, due to traffic congestion and fuel costs.
  • The market remained tenant-driven, with modern assets outperforming older stock.

• Retail Market:

  • Formal retail saw uneven performance due to fuel costs, tighter budgets, and the Ebola outbreak.
  • Occupancy in Knight Frank-managed malls increased year-on-year, and prime rents held firm due to tight supply.
  • Shoppers consolidated essential purchases, and digital payments and mixed-use formats gained traction.

• Industrial Market:

  • Occupancy remained above 80% in key zones, with warehouse rents ranging from $3.00 to $7.00 per sqm.
  • Modern facilities commanded a premium, with Namanve and Kabalega Industrial Park as key developments.
  • Infrastructure projects like EACOP and the Kabalega Industrial Park are expected to boost the sector in H2 2026.

Valuations & Advisory

• The Valuation Act 2026 was enacted in March, introducing mandatory licensing and national valuation standards.
• Implementation remains a key variable in the sector's development.

Key Trends

• Tenant Profile: Shift from expatriate to Ugandan national demand, with more short-term furnished lets.
• Supply Dynamics: Increased supply in residential and office markets, with new developers entering the market.
• Technology Integration: Emerging technologies like AI, blockchain, and GIS are transforming the real estate sector, creating both opportunities and legal challenges.
• Legal Considerations: The legal framework needs to evolve to accommodate digital transactions and ensure accountability, data protection, and cybersecurity.

Outlook

• H2 2026: Market is expected to remain subdued, with conditions still favoring buyers and tenants.
• Rental and Sales Markets: Enquiry levels will stay low, transaction times will extend, and pricing power will remain with occupiers.
• Supply Risks: An expanded supply pipeline may pressure prices further, especially as the market continues to shift towards domestic demand.
• Technological Impact: The real estate sector must adapt to new technologies, with a focus on innovation and legal preparedness.

Conclusion

The integration of new technologies is reshaping Uganda's real estate sector, offering opportunities for efficiency and transparency but also posing legal and ethical challenges. The market remains buyer and tenant-friendly, with a growing domestic demand and the need for flexible payment structures. The legal environment must evolve to support these changes and ensure investor confidence and property rights are protected.