Estate agent Knight Frank managing director Judy Rugasira said in a Zoom meeting that closing retail businesses that depend on the day-to-day cash flows for 60-days was damaging. Many of the businesses were closed in March, as the country took aggressive measures to control the spread of coronavirus disease.
renting office space and shop owners in different malls and arcades are
requesting their landlords to allow them to reduce the space they rent so
as to cut costs as they look to recover from the coronavirus
Knight Frank managing director Judy Rugasira said in a Zoom meeting that
closing retail businesses that depend on the day-to-day cash flows for
60-days was damaging. Many of the businesses were closed in March, as
the country took aggressive measures to control the spread of
the country started to close down, sales in the retail sector slumped by 68 per cent,
Knight Frank said. Supermarket
shoppers also fell by 40 per cent although the basket size in the same month increased
by 63 per cent, indicating that those that managed to go out to buy products bought in
panic anticipating a situation of no movement at all. The
situation got worse in April and May with the total lockdown.
says that now renters in malls are holding discussions will landlords to change leases
and reflect their financial situation at the moment.
//Cue in; We
Meanwhile, as the
country was locked down, most
developers of new projects in Kampala stopped construction, a move which
is likely to delay completion and the uptake rates for consumers. Also,
those who had made inquiries to buy houses have put on halt their plans
as they see how to go through
the storm, Rugasira said. This might continue for at least the next six
Kabunga, the Executive Director of Housing Finance Bank, said banking, one of
the takers of building spaces was changing and might give up a lot of space. She said
while the real branch might not close completely, it will be reduced in size. This was
the trend even before coronavirus.
Cue out…use digital.”//
On the residential
side, Rugasira said, there has hardly been any letting going on. The agents
were unable to take people to view houses and tenants have struggled to pay
For the real
estate sector, coronavirus came at a time when it was already struggling to
attract demand and more properties were flooding the market.
A lot of
space was being given up by government ministries as they built own buildings,
there was reduced Foreign Direct Investment (FDI) into the sector and more expatriates were leaving the
country. This means letting activities had reduced as well.
says coronavirus will have a long term impact on the real estate sector,
indicating that the non-performing loans that might come out of this might see
interest rates up and reduce the ability of developers to borrow.