Investigating alternative financing for commercial real estate developments in Kampala: a case study of Ntinda.

Abstract

Commercial Real Estate developing projects in Uganda, particularly in urban areas like Kampala face significant financing challenges. Traditional financing options such as bank loans and self funding may not always be viable, leaving real estate developers and investors to explore alternative financing options. This research study investigated the potential of alternative financing options for commercial real estate developments in Ntinda town, a suburb of Kampala. The study aimed to identify the most suitable alternative financing options for commercial real estate development projects in Ntinda town. The study comprised of both Qualitative and Quantitative techniques. Reviewing freshly released information on the study's topic was part of the qualitative approach. The study however, relied heavily on the quantitative technique because it was utilised to collect and analyse enormous amounts of data scientifically without the researcher's subjectivity becoming an issue. The data collected using questionnaires to obtain information from real estate developers, investors, bankers and agents and it was analysed using statistical software packages like Microsoft Excel and Stata to produce statistical presentations in form of graphs, tables and pie charts for the quantitative data obtained. Currently Bank loans have the highest percentage 28.57% of alternative sources of funding for investment purposes with self-funded at 26.19%, corporate bonds at 11.90%, issue REITs at 14.29% and corporation with others at 19.05%. The possible financing options in the future ten years, 55% of the total companies chose private equity financing, native bank loan and issuing corporate bond have 45%. 18% of the totals chose foreign bank loans, 27% of the total chose issuing stock bond, 9% of the total chose issuing REITs and 18% of the total chose to issue CMBS.