Bageine and Company: Professional Real Estate Investment Consultancy Services in Uganda

Interview with Shem Sabiti Bageine, Managing Director at Bageine and Company Ltd

What is your assessment of the real estate sector in Uganda? Is the sector competitive? What are the challenges?

The real estate sector in Uganda is one that is definitely growing but still has not attained the levels of maturity that make it comparable to the rest of the global economy. There are a number of factors behind this. Our economy is young. We lost 20 years during the difficult days where we had civil war and political turmoil. We started having a sensible economy in 1986. We do not have a very strong real estate sector in comparison with our neighboring countries who have had stability for a much longer period of time. We lag behind, but measures that have been taken with significant investment in the country and many people returning home from exile abroad over the years. The need to adopt best practices has been accepted much faster than one would have expected. Even through all that, we are not at more than 50% maturity in terms of what a mature real estate market would look like.

Is there a lack of housing in Uganda?

We are the oldest company providing the entire gamut of professional real estate investment services. We have been at the forefront of a number of lines of services such as property management for estate agencies, facilities management, site acquisition. We quite literally started everything.

Two things have happened almost in conflict with each other. Firstly, there has been stability, economic development, healthier population, high fertility rate. But, at the same time, there is an economic system that has not kept up and has even slowed down because of certain challenges such as land tenure systems, planning, infrastructure provision. The economy has not grown at the same pace as the population. What we face now is a huge population that lacks housing. To bridge that gap is a sign that the real estate market is maturing. The fact that that gap is so big is very telling. We also have issues with income levels, employment, the cost of finance, etc. There are still quite a few impediments to people being able to live in their own houses. There is a huge population boost that happened in this country over the last ten years and housing has not kept up. In 2016, we had a 2.5 million unit shortfall. As of 2020, we can estimate a 3 to 3.5 million unit shortage across the board. This is not only in terms of those who cannot afford to buy houses; although, they represent the majority demographic. It even affects the high and middle-income elements in our society. It is time to wake up and realize that certain efforts need to be made, political will to do what needs to be done in terms of infrastructure and in terms of land tenure and the ownership of rights to land in this country. Also, there is the need for the will to live by plans. There is an element in this country where planning seems to be useful for paperwork, but when it comes to the physical component, people do whatever they want. We need to change how people approach things – learn to implement your plan and then strictly adhere to that plan and then things will grow. Investment in real estate is growing every day. We are beginning to enjoy investments that are coming out to address certain social aspects. Hotels are being developed every day. Retail malls are coming up all over the city. Modern office blocks give a different experience in terms of working environment. All that is happening, but it is not necessarily at the pace that we had hoped it would be. If these two issues are addressed, we will take leaps and bounds ahead.

What are your competitive advantages? What makes you stand out from the other companies in the market?

Primarily, we are the oldest company providing the entire gamut of professional real estate investment services. In 1987, Bageine and Company opened, and in 1989 Bageine Company Ltd. began. We have been at the forefront of a number of lines of services such as property management for estate agencies, facilities management, site acquisition. We quite literally started everything. We are local content only and 100% Ugandan. There is not even one share that belongs to a non-Ugandan. That is one of the key things that we want people to realize. We give Ugandans a service that hitherto they felt should be coming from foreigners who are coming from more complicated, more sophisticated, more mature settings. It is not like that. It is something that we know about. We know the mechanics, we know everything to do with real estate, and we are local. We are born here and we will die here. So, we are with you. For us, that is one of our most important competitive advantages.

Where do you have the most business?

We are definitely pushing commercial property management. That has been our forte for a long time, particularly in the office sector. No one else has been able to deliver on projects in the manner that we have over the last 30 years. It is not only carefully planned and thought through projects, but even bad decision investments which we have turned around (a number of them, both public and private) that we are locally known for. In fact, when people get into a rut, they know to come to us because we can turn their situation around. We have put in quite a lot of effort into estate agency. This is the handling of the purchase, sale, letting, marketing of properties for individuals who are looking for tenants or buyers for their properties. In the States, they might be called realtors.

What are some projects you are pushing at the moment?

Our flagship commercial management project is for the UAP Nakawa Business Park. We have managed to hold it at a very impressive level of occupancy and return on investment for our client. We will continue to do so for as long as we need to satisfy our client’s needs. We are also looking at a number of residential projects and properties that are being developed. One of the key ones that we are involved in intimately is the Pearl Marina where they are developing roughly 420 acres. It will be a literal satellite city with a marina so that we can start using the lake to get to and fro. We also have an engagement with Comfort Homes who deal with more middle income based products. We are making a drive in the market to let people know that we are not limited to “big projects”. To us, every project is a big project. If you have a hut in Karamoja and you ask for our services, we will do them at fair cost. We provide service to anyone from the biggest to the smallest and everyone in between. We continue to offer a myriad of services and we are looking at consolidating our position which is quite significant in the market.

Can you explain the Business Park in more detail?

Nakawa Business Park is the first of its kind. It is 22,500 m² with four towers, each about 5,500 m². It is the first business park development in the country where the office users get to have that unique feeling of being in a close and safe environment in the company of like-minded businesspeople. Each tenant complements others in terms of business services and being around significant anchor tenants such as UDRA, SGR, etc. They can also enjoy the investment prowess of the landlord, UAP. They have experience in Nairobi developing significant commercial projects and they have been quite successful. They have given Kampala the first taste of a discerning office environment. The Business Park is fully equipped, it has high speed lifts, generator backup power, and 558 car parking slots so you will not be wanting for parking when you come there. The beauty of the location is that it is located outside but within the city. Kampala’s Central Business District is congested, resulting from various planning problems. It could have avoided the congestion it is suffering now had the planners planned and implemented those plans. It would have been a different picture. There is also noise pollution, problems with crime, and most people are not very comfortable being in the city. Nakawa Business Park, being where it is located, is near the city but does not have those negative characteristics of the CBD. Then, you have the added comfort of a beautiful working environment where you can park comfortably, fully open plan floors, AC if needed but naturally ventilated so it feels like there is climate control, which is a very rare thing in buildings in Kampala. It is quite a unique project. I always invite many of the office users I meet. I am very proud to have our company involved in the management of that project.

Project yourself into the medium term. What is your vision for the company? What do you want to achieve?

Our first objective is to consolidate Bageine and Company Ltd. as a leader in the market. A number of things have been done towards that goal including restructuring internally, revisiting relationships with our clients, obtaining feedback so that we can continuously add value to the services that we offer them. All that retains the business that we have. That comes with a component of business development of always having the opportunity to get more business in addition to keeping your current business. The second angle is to broaden our service. One of the ways we have been thinking about doing this is for us to get involved directly into these projects, put our money where our mouths are so to speak. Instead of advising people and telling people how to do their projects, we want to go in there and show that we mean what we say by doing it ourselves. The client will then see that we can walk alongside them together. If it is successful, we may end up going into full-fledged property development. The third point is giving back, especially in relation to the housing challenges in this country. We have started discussions with an NGO called Habitat for Humanity. The idea is now to work together with them to provide low cost housing. Having 30 years’ experience in the industry, being the professionals that we are, with the networks we have, we can build up some kind of velocity so that we can get a lot of these houses addressed through CSR avenues. Some of the houses they are building only cost 20 million Ugandan shillings. We could probably even build one for a family if we could get each company to chip in and do the same.

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