Assessing the effect of service charge on the tenancy of shopping malls in Kampala
Abstract
Knight Frank, (2021) stated GDP growth to be 2.9% for financial years Period 2019 to 2020.
The Retail industry which comprises shopping malls, arcades whose average turnover was
largely affected. Year to year turnover figures reduced on average by 20% and an increase in
8online trade accounting for 20% of retail as a result of Covid 19. Closure of anchor tenants in
shopping malls in 2020 such as Game, Shoprite and Tuskys supermarkets which could be
partially attributed to high rate of service charges.
In RICS(2018),the new government Code recognizes that the RICS Professional Statement
on Service Charges in Commercial Property provides the best practice for the industry is to
work to with its stated aim to promote best practice, uniformity, fairness and transparency in
the management and administration of services charges in commercial property for the
benefit of all parties.
The Code recognises that the current position places a huge burden on all parties’ occupiers
and owners and RICS encourages all parties to work together on a case-by-case basis to
recognise these challenges and create an approach that is proportionate and appropriate for
each set of unique circumstances.
The absence of regulations on service charges in the Landlord Tenant Bill of 1979 of Uganda
has caused speculations and exorbitant tendencies among landlords. Majority of commercial
properties in Uganda have unclear and unfair methods of apportioning service charges
causing it to be exaggerated on top of the high rental charges which frustrates tenants causing
a decline in the demand for rental spaces