Metroplex redevelopment hangs in balance

The over $20m (Shs74b) investment in redevelopment of Naalya Metroplex mall could be in jeopardy pending the President’s assent to the landlord and tenant bill.

Ms Judy Rugasira, managing director Knight Frank Uganda told Prosper Magazine that the next step by the developer depends on if the president signs the recently passed Landlord and Tenant Bill.
“They are waiting to see if the president will sign then they decide what to do because it will have an impact on their projections and business plans moving on,” she explained.

Knight Frank last week announced the sale and redevelopment of Naalya based Metroplex mall to a Mauritian firm.
Gateway Delta is a private real estate development company registered in Mauritius that has acquired Naalya Metroplex mall at an unknown amount.

The sale from its previous owners – Somani family of Metropole Properties, was brokered for one and a half years.
Ms Pumi Lukhele, development manager Gateway Delta said, “We are currently finalising the acquisition of Metroplex shopping mall and local consultants have already been appointed to commence with the redevelopment process.”

Landlord and Tenant Bill
Now, the developer’s actions depend on whether the president will assent to the controversial Landlord and Tenant Bill.
Landlord and tenant bill
In the Bill, a landlord shall not increase rent by more than 10 per cent annually and shall provide three months’ notice in case of any increase of rent.

The Bill also reads that in case a landlord serves a misleading or false statement within the notice, he or she is liable to jail not exceeding a year or a fine not exceeding Shs480,000.
A landlord who evicts, attempts or compels to evict a tenant is liable to prison time or fine or both.

Once convicted in court, a landlord shall reimburse a tenant for damages pertaining to the unlawful eviction.
According to the Bill, a landlord can only evict a tenant after receiving a court order permitting the eviction and apply in court to recover rent arrears.

Developers’ take on Bill
Developers and landlords have criticised the Bill saying it is “one-sided” and will affect the housing market.
However, the judiciary in February reported a case back log of 155,400 at different levels of court.
The Bill also bans rent payments in alternative currencies aside from Uganda shillings.

However, Mr Chris Baryomunsi, the Minister of State for Housing, explained that the ban does not deny landlords the choice of demanding rent as the equivalent of the amount in dollars.
If a landlord takes the value in terms of dollars, and converts it into shillings and the tenant agrees, no problem. It is also okay. If a tenant and landlord agree to receive payment in dollars, it is okay. What we outlawed is where the landlord insists that he cannot receive local currency,” he says.

A landlord, according to the Bill, will also be liable to a fine if found to be annoying the tenant. However, the Bill does not expound on what counts for “annoying” a tenant.
Mr Baryomunsi defended the Bill as being fair to all parties saying government tried to create a win-win law.

Redevelopment
The Bill has been passed at the heels of a subtle revival of the real estate sector after the exit of supermarket chains Uchumi and Nakumatt from Uganda.
Currently, Bugolobi Village mall and Naalya Metroplex are scheduled for redevelopment. Carrefour, French supermarket chain has announced its debut into Uganda opening two stores, at Oasis mall and Naalya Metroplex.

Infrastructure is a key ingredient in development of an investment. For instance, Metroplex mall, whose meagre foot fall, otherwise known as visitors into the mall, below 100,000 people was attributed to lack of access to the mall.
Ms Lukhele said, “The location of Metroplex shopping mall is absolutely ideal from a retail point of view, especially with the construction of the new access road from Kyaliwajjala-Naalya road, expected to be completed this year 2019.”

The mall, expected to officially open in April 2020 will create more than 2,000 jobs, with 800 during the construction phase, 400 and 1,000 direct and indirect jobs, respectively after it opens.