Standoff over rent in Kampala will cause bigger crisis, says sector player

Mr Haruna Sentongo, one of the real estate players in Kampala City is worried about a looming crisis in the sector if the current standoff between some owners of arcades and shopping malls and their tenants is not resolved.

The standoff stems from accumulated rent arrears which landlords are demanding from tenants since March when the government announced a lockdown to control the spread of coronavirus.

Some landlords have written off the rent arrears and allowed their tenants to resume business while others insist that the tenants have to clear the arrears.

The tenants under Kampala City Traders Association have run to court to seek an order that would restrain the landlords from collecting rent for the period they spent without operating their businesses in the arcades.

The traders also want an injunction restraining landlords from evicting tenants.

“If you demand rent for the period of when the tenants were out of business, it means a tenant has to pull out about Shs18 million from his/her business. In the end, this trader will not break and will be forced to vacate the shop. This means that the landlord will also be out of business" he said.

He said that if the standoff is not resolved amicably, the real estate sector in the Central Business District will be crippled since rent fees are likely to rise as landlords seek to recover the money that would be lost when the current tenants leave.

Mr Sentongo is one of the landlords who exempted tenants from paying the arrears they accumulated during the lockdown.

New and existing occupants of his shopping malls in Kisenyi, Kampala Central, have been exempted from paying rent for the next three months.

Most landlords have failed to come up with a plan how tenants will pay the arrears.

They cite bank loans which they have to service for their tough position.

“They [tenants] don’t have the rent arears you are asking them to pay,” Mr Ssentongo said. “You are creating a bigger problem for the coming months because the arrears will keep accumulating if landlords continue blocking traders from accessing the shops.”