{UAH} Why arcades and apartments are empty.
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4:06 AM |
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By Afunah Dixy TinTin
Why arcades and apartments are empty.
Me: If your claim is construction of infrastructures, commercial and residentials hasn't affected our economy, then you are saying people have money. So why are they not occupying these buildings since they have the money? Go downtown, arcades aka malls are nearly empty. Apartments are empty, why are they empty?
Him: First, is there a demand for commercial buildings and accommodation? Yes. Is what is on market what Ugandans are looking for? No. The current market demands for low cost commercial buildings and accommodation but what landlords are building are high end structures which Ugandans can't afford. This mismatch is the reason responsible for the empty structures that you are seeing. An example is, about 6000 University students graduate every year. Out of these, at least 1000 remain in Kampala. They surely need accommodation but many of them hardly earn enough money to afford rent of say about 700k for the apartments you see. So if this is what you are charging, you are chasing away such people and many more who fall under that category, who are the majority btw. This leaves your structures empty.
The same applies to those arcades cropping up. What those downtown traders need is just shelter where they can sit and sell their merchandise. If you build high end structures where monthly rent is nearly their capital, they will look for other favourable alternatives leaving your buildings empty.
Me: so where do you see this ending........?
Him: Economies have a natural way of correcting themselves. Even this will correct itself. It will be a slow but very painful to some.
Me: Painful to who?
Him: The people borrowing from banks to build those buildings. If they remain unoccupied for quite sometime, these landlord won't have anywhere to get the monies to service their loans. What will happen is banks will takeover these buildings and other properties then sell them cheaply to new owners. Since new owners have bought them cheaply, they will also rent them out cheaply - and the economy will have corrected itself much as it will be after inflicting pain to the original owners.
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-- Why arcades and apartments are empty.
Me: If your claim is construction of infrastructures, commercial and residentials hasn't affected our economy, then you are saying people have money. So why are they not occupying these buildings since they have the money? Go downtown, arcades aka malls are nearly empty. Apartments are empty, why are they empty?
Him: First, is there a demand for commercial buildings and accommodation? Yes. Is what is on market what Ugandans are looking for? No. The current market demands for low cost commercial buildings and accommodation but what landlords are building are high end structures which Ugandans can't afford. This mismatch is the reason responsible for the empty structures that you are seeing. An example is, about 6000 University students graduate every year. Out of these, at least 1000 remain in Kampala. They surely need accommodation but many of them hardly earn enough money to afford rent of say about 700k for the apartments you see. So if this is what you are charging, you are chasing away such people and many more who fall under that category, who are the majority btw. This leaves your structures empty.
The same applies to those arcades cropping up. What those downtown traders need is just shelter where they can sit and sell their merchandise. If you build high end structures where monthly rent is nearly their capital, they will look for other favourable alternatives leaving your buildings empty.
Me: so where do you see this ending........?
Him: Economies have a natural way of correcting themselves. Even this will correct itself. It will be a slow but very painful to some.
Me: Painful to who?
Him: The people borrowing from banks to build those buildings. If they remain unoccupied for quite sometime, these landlord won't have anywhere to get the monies to service their loans. What will happen is banks will takeover these buildings and other properties then sell them cheaply to new owners. Since new owners have bought them cheaply, they will also rent them out cheaply - and the economy will have corrected itself much as it will be after inflicting pain to the original owners.
"When a man is stung by a bee, he doesn't set off to destroy all beehives"
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