Property Services (PSL) Sustains Real Estate Investments

Kunnal Karia, CEO, Property Services (PSL), talks to World Business Journal about the Royal Palms Butabika project and its long-term commitment to the development the real estate sector in Uganda.

Can you provide an overview of Property Services (PSL), its evolution and the range of services you offer?

PSL has a rich history spanning five generations, dating back to 1904 when my great-grandfather first immigrated to Uganda. Our family legacy is deeply intertwined with the region, and it includes notable contributions like the construction of Kisoro High Street. Originally known as N.H. Karia in the 1950s, we underwent rebranding in the 1990s to become PSL. Today, we stand as one of the largest commercial space providers in the country, with a dedication to Uganda’s real estate sector. Our service range has evolved significantly since the 1990s. While we initially offered client services, our focus has shifted towards delivering high-quality products to the market. We prioritise Grade A office space and various commercial spaces, covering warehousing, residential, industrial space and the development of head offices for banks, embassies and international organisations. We are also one of the few qualified providers to supply and develop space for a wide spectrum of real estate needs in Uganda. 

What projects does PSL currently have under way?

Our projects are structured within production cycles, varying from 18 to 24 months, contingent on their size and complexity. In our ongoing production cycle for the next two years, we are set to introduce approximately 1m sq feet of space, or 300 to 400 additional residential units that will be introduced to the market and complemented by a pronounced focus on commercial space. The majority of the commercial space will be dedicated to office space, but also include warehousing.

Additional projects in progress include 100 residential units in Kololo, the development of new office space in Kitante, office-built residential structures in Lugogo that include 70 apartments, as well as a forthcoming apartment project in Mbuya. Furthermore, we are engaged in an office project in Nakasero, playing to our strategy of targeting the diverse demands of the market in several regions.

What distinguishes the Royal Palms Estate, Butabika from other projects?

Royal Palms Butabika stands out primarily due to its remarkable scale in organised planned living, making it the largest of its kind in East Africa. The project includes over 1000 residential units, with 500 units already completed and an additional 112 scheduled for completion in 2023. Furthermore, it boasts the GEMS Cambridge International School, a health club and a thriving community. The development includes expansive parks and a 5-km walking track situated within the estate. To further project development, we aim to add another 100 units every 18 months. Currently, the project is around 50% completed, with an estimated 4-5 production cycles remaining until it is fully finished. The Royal Palms Butabika has already become home to more than 400 families, and the total project investment has exceeded $75m.

In which areas do you see the greatest potential for growth and most promising opportunities for residential properties in the medium term?

The most promising opportunity for residential properties lies in the lower end of the market. To fully unlock this potential, we need supportive government policies that encourage investment in this sector. While there are already numerous players in the market, the lower end of the market remains underserved due to certain policy constraints. If government policies were adjusted to make it more attractive for commercial developers to participate in this space, we could expect significant growth. An example from Kenya is their zero-rated value-added tax (VAT) on residential properties, which directly results in an 18% cost reduction for homeowners. In Uganda, VAT is exempt for residential properties, meaning that home developers consider it a cost and are unable to claim it back, thus passing the cost on to the homebuyer. To foster growth, changes in these policies could be a game-changer.

How do you assess the investment climate in the country?

Uganda presents a favourable environment, characterised by positive policies that welcome new entrants. Three key factors contribute to its attractiveness: economic progress, security and a young, educated workforce with a mindset centred on growth. These positive aspects have laid the groundwork for investment and economic development, making Uganda an appealing destination for both local and international investors.

How do you envision your company’s role in shaping the future of the real estate sector?

Our vision is to be a leading investor and contributor to the country’s growth. We are committed to fostering the development of commercial office spaces and residential properties, aspiring to become the largest real estate investor in Uganda. Our commitment to this market is deeply ingrained, coupled with long-term goals. We aim to preserve this legacy for generations to come.

UTel Prioritises Customer Acquisition

Can you outline Utel’s ownership structure, and what changes are expected in light of its rebranding?

UTel’s ownership is structured in that the Ministry of Finance, Planning and Economic Development (MFPED) holds a majority share with a 60% stake and the Ministry of ICT and National Guidance has the remaining 40%. The decision to rebrand UTel in August 2023 was driven by the need for a distinct identity, especially in light of the acquisition of the assets of Uganda Telecom (UTL) by Uganda Telecommunications (UTCL) in February 2022. UTL executed the asset sale and purchase agreement with UTCL for Shs256.9bn ($72.6m), which eliminated any confusion between the two companies.

The primary objective of the brand unveil was to introduce the brand identity logo or UTCL’s trade name,  UTel with the tagline, ‘Your Network, Our Pride’ with an objective of creating digital access solutions that are affordable and deliver value for money to the underserved Ugandans UTel will target the Youth, the small and medium-sized enterprises (SMEs) and government ministries, departments and agencies. The company will offer a range of services with particular focus on the high-growth categories of data and financial technology (fintech) services.

What are the primary areas where the planned capital injection by the government will be allocated?

In the medium term, for sustainable growth through data services, UTel will use the Shs300bn ($80m) capital injection to build its 4G network so that it will be scaleable to 5G. This will involve a two-part strategic roll-out plan that will entail both asset building and sweating the assets.

During the asset-building stage, UTel will invest heavily in infrastructure and customer acquisition. The goal during this stage will be to revamp operations and upgrade the company’s 2G network to 4G. That said, a sizeable subscriber base is a critical asset within the telecoms sector. As part of our strategy, we will aggressively drive customer acquisition in the first part of the rollout. Owing to the large investments that are required, we anticipate that the first part of our strategy will be one that is a loss-making period for UTel.

How will you navigate a highly competitive telecoms landscape, and what strategies will you employ to meet the diverse needs of your customers?

First, we will position ourselves as a champion of consumers that drive innovation and investment to offer a clear alternative to incumbents with product-centric and quality-focused positioning. Second, we will leverage costs on effective technology as a key enabler. UTel is not limited to the 3G legacy systems, and therefore there is a focused implementation on 4G, which delivers lower costs of ownership. Lastly, we will offer friendly pricing and besides the price point, UTel will simplify its pricing to deliver a sense of fairness, integrity and transparency.

What is your vision for the future of UTel?

UTel’s vision is one in which a prosperous nation has within it, digital services that are within reach for all. Digital services are within reach if the customer can seamlessly access them in every part of the country. If the customer can afford UTel’s products and consume the products without worry of the price because consumers are receiving the proper value for their money, then we have been successful in our mission.

Pulse of Conservation: CTPH’s Health-Powered Gorilla Journey

In the 21st century, how do ecotourism and conservation efforts coexist without harming one another’s interests?

Since the early 20th century, tourism and conservation have coexisted, the link between tourism and conservation is being expanded upon and improved upon by ecotourism. Enhancing the sustainability standards, it expands on the notion of employing tourism to support conservation and vice versa. Therefore, ecotourism was designed by conservationists in the 1980s, at the dawn of sustainable development, to channel tourism revenues into support for conservation and local development. Despite ecotourism having many definitions, it has one distinct set of principles. It is an alternative to other forms of tourism development, designed to ensure a positive feedback loop between tourism and conservation while addressing both social and environmental goals.

What are the key benefits and outcomes of the Gorilla Conservation Coffee (GCC) initiative?

Conservation Through Public Health (CTPH) established GCC as a social enterprise to improve the livelihoods of the communities surrounding Bwindi Impenetrable National Park by assisting them in getting international market prices for their coffee and training them in sustainable coffee farming and households income improvement. The initiative has created an international market for smallholder coffee farmers in Bwindi which they would not have gotten, subsequently getting a premium price. GCC helps to preserve the endangered mountain gorillas by providing sustainable financing for their protection by giving farmers a viable alternative livelihood through coffee farming; which in turn reduces their need to poach and collect fuel wood taking the pressure off the gorillas and their habitats, and helping to reduce human-wildlife conflict and cross-species disease transmission among the major threats to wildlife conservation.

How has Uganda championed the causes of gorilla conservation efforts, and where is there room for improvement and reforms on a national level?

Uganda Wildlife Authority (UWA) is mandated to ensure sustainable management of wildlife resources, and has worked with partners to ensure gorilla conservation efforts, but also to educate local communities and people from all over the world about the value and benefits of protecting these endangered species, and keeping them for future generations.

Saving gorillas in the wild is a complex and difficult task, but certainly within our hands and each of us has a role to play, from policymakers down to consumers.

In partnership with UWA, CTPH has put a lot of effort in protecting all the 25 habituated gorilla groups in the Bwindi landscape from threat. First, by improving gorilla health through regular health monitoring of habituated gorilla groups; second, by improving community attitudes to gorilla and forest conservation including reducing illegal use of the forest for poaching and harvesting of timber and non-timber forest products; and third, by improving their conservation practices through promotion of clean energy where we have started with energy-saving cook stoves, soil and water conservation and sustainable agriculture. As well, CTPH has increased support for gorilla conservation both in local and international communities. For improvement and reforms at the national policy level, a lot more input is required to address the negative impact of environmental degradation and to allow citizens to be put in the best position to make a positive change to protect their habitats and environments. 

As CTPH approaches its 20th anniversary in 2023, what has been the organization’s greatest achievement and its biggest setback, and how are these experiences shaping CTPH’s future direction?

After realising the need to holistically prevent and control the human/wildlife/livestock cross-species disease transmission in protected areas of Uganda, CTPH has implemented a One Health approach at Bwindi, which has been further scaled to other landscapes in Uganda and gorilla-protected areas in the Democratic Republic of the Congo.

CTPH set up one of the first One Health field programmes in the world to promote conservation and in the process has established an award-winning scalable and sustainable model of Village Health and Conservation Teams. We find that as community health and conservation practices are improving, gorillas are falling sick less often from diseases in the local communities such as scabies and giardiasis. We are also excited that this One Health has improved community attitudes to gorilla conservation because we are addressing their health, a basic human right. 

CTPH successfully launched the Policy Brief on Responsible Tourism to Great Apes at the inaugural Africa Protected Areas Congress (APAC), in Kigali in 2022. This was coauthored with International Gorilla Conservation Programme (IGCP) in collaboration with the Africa Civil Society Organizations biodiversity alliance (ACBA). The policy highlights the key challenges and threats facing Africa’s endangered great apes which include gorillas, chimpanzees and bonobos, particularly in the wake of the Covid-19 pandemic.

We are excited to have published Walking with Gorillas, a memoir and charter about of my conservation and leadership journey shaped by One Health that came out in March 2023 and thus far, has been official launched in five countries: The US, UK, Uganda, South Africa and Kenya and also available in Canada and Rwanda and others through Amazon and other platforms.

Uganda Manufacturers Association (UMA) Driven in Commitment to Manufacturing

How has the role of Uganda Manufacturers Association (UMA) evolved since its establishment?

Since its inception, UMA has undergone a transformation in its role within the manufacturing sector. Initially, our primary focus was on advocacy for manufacturers’ interests and fostering a platform for networking and collaboration. Over time, our scope has significantly broadened to embrace a more comprehensive range of activities within the manufacturing sector.

Previously, the country had been a net importer of various products, from sugar and salt to soft drinks and clothing, but without value addition. UMA has played a pivotal role in championing industrialisation in Uganda since its revival in 1988, which marked a significant turning point in the country’s industrial landscape.

By the mid-1990s, exports constituted only 7% of Uganda’s GDP. Fast forward to 2022, and this figure has more than doubled to nearly 15%, with a diverse range of products now competing in regional and global markets. According to the Uganda Export Promotion Board in 2022, manufacturing exports surpassed the $1bn mark, while the tax contribution of the manufacturing sector stood at 23% of Uganda’s total tax revenue. UMA is enthusiastic about leveraging the African Continental Free Trade Area (AfCFTA) to further boost these export figures.

Today, UMA’s role extends beyond advocacy, encompassing capacity building, policy formulation and promoting sustainable practices within the industry. We are committed to driving innovation, competitiveness and responsible growth in Uganda’s manufacturing sector.

What were the key developments in Uganda’s manufacturing sector in 2023?

In 2023 the sector experienced several developments. A notable shift was observed with the increased integration of technology and automation, aimed at enhancing both productivity and product quality. There was also a significant focus on value addition, particularly within the agricultural and agro-processing subsectors. Furthermore, there has been a marked trend towards embracing environmental, social and governance (ESG) initiatives among industrialists in Uganda. Recognising the imperative to remain competitive and ensure the long-term sustainability of our industries, has made for a concerted move towards adopting sustainable business practices and comprehensive reporting mechanisms.

To what extent is Uganda prepared to capitalise on trade opportunities arising from AfCFTA?

Uganda is strategically positioned to seize the opportunities brought about by AfCFTA. The AfCFTA Agreement is set to establish a single continental market for goods and services, thereby opening up vast potential for trade expansion and economic progress. Uganda’s central location in East Africa offers a key advantage for tapping into and accessing regional markets.

Uganda’s export-to-GDP ratio stands at approximately 15%, showcasing a growth trajectory in the country’s trade landscape. Nonetheless, maximising the advantages of AfCFTA demand a robust commitment to addressing the challenges and constraints faced by cross-border trade such as the non-tariff barriers by partner states and infrastructural challenges that hamper connectivity.

How is UMA actively bridging the skills gap within the manufacturing sector?

UMA is deeply committed to addressing the skills gap in Uganda’s manufacturing sector, recognising that a skilled workforce is essential for industry growth and competitiveness. We have embarked upon several strategic initiatives, including forging partnerships with educational institutions to craft industry-relevant curricula and provide practical training programmes.

One of our significant endeavours includes collaborating with government agencies and development partners to amplify vocational and technical training opportunities. We have facilitated apprenticeships and on-the-job training programmes, ensuring that theoretical knowledge is complemented with practical skills. A highlight of our efforts is UMA’s Access to Employment project, which has successfully placed 50,000 students in various industries for internships and on-the-job training, fostering a direct link between educational institutions and the manufacturing sector. We are further encouraged that the sector created 1.61m direct or outsourced jobs that are aligned with manufacturing activities, this according to the Ministry of Gender, Labour and Social Development.

How is the green industrial revolution being advanced in your sector?

The green industrial revolution is gaining momentum within the sector, as there is a growing recognition to adopt sustainable and environmentally friendly practices. UMA is at the forefront of this transformation, actively advocating for and implementing various green initiatives.

In light of this, UMA has initiated the national Green Industrial Agenda, a strategic framework designed to unify efforts towards embracing ESG principles across the sector. The agenda has four central pillars: preserving biodiversity, reducing pollution, effectively managing waste and promoting self-regulation.

What is your outlook for the sector in the next two years?

Looking ahead, we envision a manufacturing sector that is not only thriving but also sustainable and responsible. We anticipate increased investment in renewable energy sources and energy-efficient technologies, alongside a continued focus on waste reduction and circular economy practices.