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.
