MAK HOLDINGS INVESTOR CONFERENCE – PROPERTY MARKET OVERVIEW

5th December 2017

Presentation Outline

• Knight Frank at a Glance

• Vital Statistics (Economy, Demographics)

• Why Invest in Uganda?

• Real Estate Market Overview

• - Residential

• - Commercial/Office

• - Hospitality

• Investment Opportunities with Mak Holdings Ltd

• Infrastructural Improvements (Road and Transport Network in Kampala)

• Conclusion

• Q&A

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Knight Frank At A Glance

Knight Frank Global Property Consultancy Firm established in London in 1896, and in Africa ( Nigeria first) in

1965. Largest independent real estate agency in the world Newmark Knight Frank - New York-based global partner Operations in over 417 offices in 62 countries on 6 continents 15,000 employees globally.

Knight Frank Africa Operations in 23 offices in 10 countries, 700 employees. Rwanda – latest addition to the Global Footprint.

Knight Frank Uganda Since 2000 with 155 employees Service lines:- Property Valuations, Commercial (retail and office) property management,

residential property management, Agency (acquisitions and disposals), Consultancy.

Global Foot Print

Australia, Bahrain, Belgium, Botswana, Cambodia, China (Hong Kong/Macau), Czech Republic, France, Germany, Hungary, India, Indonesia, Ireland, Kenya, Malawi, Malaysia, Monaco, New Zealand, Nigeria, Poland, Russia, Rwanda, Singapore, Spain, Tanzania, Thailand, Uganda, United Kingdom, Ukraine, Zambia, Zimbabwe

Associate offices:- Bermuda, Brazil, Canada, Caribbean, Chile, Italy, Netherlands, Portugal, Romania, USA

ECONOMIC OVERVIEW

• Uganda’s GDP at market prices (UGX Billions)

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MONEY MARKET & INFLATION INDICATORS 2017

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DEMOGRAPHIC PROFILE - UGANDA

• Population And Annual Growth Rates 1980 - 2014

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0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

1980 1991 2002 2014

Growth rate

Population

Year

Population Growth rate

Population growth: • 3.3% p.a - 2002-2014.

Projected Popn:• 45.8m in 2020• 53.5m in 2025• 61.9m in 2030

No of Households: • 7,305,887 in 2014 & • 5,043,256 in 2002(Average Hhd size of 4.7 people)

Source - UBOS

DEMOGRAPHIC PROFILE -KAMPALA

• Population Pyramid of Kampala

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WHY INVEST IN UGANDA?

Fully liberalized economy

Free Inflow & Out flow of Capital

Stable Annual Economic Growth – 5%

Stable inflation – low, single Digit Increased Government Expenditure on infrastructure - Over US $ 1bn

Population Growth Rate 3.3% paRelatively Secure country

Tourism Opportunities -Ranked No.1 destination in Africa for 2017 by Rough Guides

Strong Natural Resource Base – Oil & Gas

Market Access – SSA Strategic Positioning

PROPERTY SECTOR AT A GLANCE.

Sector Prime Passing Rents

Yields Occupancy Rates

Outlook

Office $16 - $17 net (psmp)

10% - 11% 85% Positive

Retail $ 22 - $100 net (psmpm)

12% - 14% 90% Strong

Residential (2 & 3 bed Apartments)

$ 2,500 - $ 3,500 per month

8% - 10% n/a Vibrant

Industrial $ 4.50 - $6.00 (psmpm)

13% - 15% 80% Positive

Hospitality $ 150 – $200 60% Positive

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• There is an emerging segment within the student accommodation space.• For hospitality ADR’s presented above are for 4 and 5 star hotels.

RESIDENTIAL PROPERTY SECTOR OVERVIEW

• Residential property sector continues to grow supported by improvinginfrastructure and growing suburbs.

• The top end of the market has continued to attract both private and institutionalinvestors given the attractive returns over the years.

• Yields at the top end of the market are between 8% - 10% for USD basedrentals.

• For build to sale properties, developer’s profit ranges between 25% – 30%

• The biggest opportunities within the residential segment is in the middle to upperlow income bracket where demand outstrips supply.

• Uganda has an annual housing deficit of 210,000 units and 65,000 of this iswithin urban areas. Majority of this demand is for affordable housing.

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PRIME RESIDENTIAL RENTS – HOUSES

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Rents for houses in prime residential locations

RESIDENTIAL PROPERTY MARKET PRICES-CONTD

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Rents for serviced & furnished apartments in prime residential locations ($)

HOSTEL / STUDENT ACCOMODATION SECTOR.

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• Makerere University current student population – 40,000 students, growing at4% per annum.

• Currently, a total of 5,124 students have accommodation offered by theuniversity, at a space ratio of 13.76 sq.m per student totaling 70,506 m2 which isonly 12% of the requirement.

• Over 80% of student accommodation is built by private developers.

• Total built up area currently required for accommodation is 558,216 m2.

The Case for Student Accommodation

• There is a large and growing student population

• Universities can’t keep pace with demand for accommodation

• Higher education is recession-proof

• Net yields (13% – 14% which are often higher than traditional BTL (by to let)

gross yields.

• Purpose-built student accommodation in which students want to live

• Parents act as rent guarantors

• Professional property management

• Students could become long-term tenants.

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AVERAGE HOSTEL FEES PER SEMESTER

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Hostel Name Location Rent per semester (UGX)

Double Room (self-contained)

Double Room (ordinary)

Single Room (Self-contained)

Single Room (ordinary)

Ark Katanga 900,000 None 1,600,000 (Big) & 1,300,000 (Small)

None

Braeted Katanga 900,000 None 1,600,000 NoneMaimood Katanga 750,000 None 850,000 - 1,300,000

dependent on sizeNone

Dream-world Kikoni 750,000 (both Toilet and bathroom) & 640,000 (Only

bathroom)

580,000 1,200,000 930,000

Akwata Empola

Kikoni None None None 800,000

Kare Kikoni None 600,000 1,400,000 700,000Olympia Kikoni 950,000 None 1,400,000 NoneBridgeton Kikoni 650,000 None 900,000 550,000Muhika Kikoni 900,000 550,000 1,000,000 850,000Nana Kagugube

Road850,000 None 1,400,000 None

Miriam Kikumi-kikumi 620,000 (50rooms) & 660,000 (19rooms)

600,000 850,000 700,000

Akamwesi Nakawa 1,500,000 700,000 1,200,000 800,000Waterloo Kikumi-kikumi None 640,000 None 900,000

OFFICE SECTOR OVERVIEW

- Past 3 – 4 years office rentals have dropped and levelled out against a back dropof low demand and over supply in the Grade AB/B space, putting pressure on primerents.- Noticeable improvement in office rents and take up of space by H2 2016.- Noticeable increase in take-up of Grade A/AB office space, in modern, energy

efficient buildings, with adequate parking space out of the congested CBD area.- Vacancy rates have been highest in newer buildings with tenants driving hardbargains.- Prime office rentals still holding their values.- New office space demand continues to be driven by factors like ample parking,better facilities and less traffic congested areas.- Grade A office yields - 10% - 11%- Grade A rents - $16.00 - $17.00 per sq.m p.m- Grade B office rentals - $12.50 - $15.00 per sq.m p.m.

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HOSPITALITY PROPERTY SECTOR

• Figures from the 7th Annual Tourism Sector Performance Report indicate that

tourism continues to be a pillar of Uganda’s economy, contributing nearly

Shs7.3b to Gross Domestic Product (GDP) in the financial year 2015/2016. This

translates into 9% of the country’s GDP. This was an increase from Shs6.3b in

2014/15 financial year.

• Uganda was named as the fourth best tourism destination in the World and

number one in Africa for 2017 by the Rough Guides, a leading travel publisher.

Uganda is expected to attract more tourists in 2017 with its astonishing wildlife.

• There is no formal hotel grading system in the Uganda Hotel sector. Most of the

hotels graded as 5 star hotels are in actual sense closer to 3 – 5 star (midscale).

• The sector has continued to show good growth with occupancy rates averaging

between 65%- 70% and Average daily Rates (ADR’s) at $150.

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HOTEL DEVELOPMENT PIPELINE FOR UGANDA IN 2017

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• No of new planned Hotels: 12

• Total No. of Rooms: 1,751

• Pre-construction planning: 48%

• Rooms on site (Construction): 52%

• Average Daly Rates – $150

• Average Occupancy levels – 70% - 80%

Source: W-Hospitality Group

CONFERENCES AND EVENTS PERFORMANCE.

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Location # of conferences Jan-Nov 2016

# of ConferenceAttendees

# confirmed conferencesDec-July 2017

Kampala 907 16901 744

Entebbe 167 13677 8

Jinja 495 15702 279

Total 1,569 46,280 1,031

TOURIST ARRIVALS BY PURPOSE

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LOCATION OF THE 3 SUBJECT SITES IN KAMPALA.

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Kampala Major Arterial Routes

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Makindye

KololoMakerere

MAKINDYE – RESIDENTIAL DEVELOPMENT OPPORTUNITY

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14.00 Acres Plot in Makindye – 400 Housing units .

MAKERERE UNIVERSITY CAMPUS SITE – STUDENT ACCOM.

& CONVENTION CENTRE

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KOLOLO - COMMERCIAL PROPERTY DEVELOPMENT

OPPORTUNITY.

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Approx 13 Acres

6.14 Acres: Business office

park with a GBA of 100,000 m2.

4.15 Acres: 5 Star hotel with 150 keys

3.00 Acres: 100 Luxury 3- bedroom apartments @ with

GBA of 240m2 selling @ $375,000

KOLOLO - PRIME COMMERCIAL SITE

Mixed Used Development in Kololo on 13.00 Acres of land comprising aBusiness Park, Hotel and Luxury Apartments.

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Hotel (2.5 acres)

Business Park 1 (4 acres)

Business Park 2(3.5 Acres)

INFRASTURUCTURE PROJECTS BOUND TO TRANSFORM

KAMPALA

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The Kampala-Entebbe Express Highway

Links the Kampala Northern Bypass with

Nakasero

Connects to the Major hotels and

Conference Centres

Links with the Kampala Flyover

Construction

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Nakasero VVIP Express Route

Kampala Flyover Project

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MASS RAPID TRANSPORT SYSTEM

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CONCLUSION

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• Real estate is cyclical business and as such it follows economic cyclesand is a long term investment that requires a long term attitude.

• According to the IMF, economic growth is expected to accelerate to 5%in the next financial year (2017/18) buoyed by improving weatherconditions and a recovery in private sector credit. Additionally,Infrastructure and oil sector investment are envisaged to lead recoveryof growth to 6% over the medium-term.

• Real estate as an asset class creates an opportunity for relatively highrisk adjusted returns for investor who can obtain cost efficient, highquality information.

• Above all, the World Bank has lifted suspension of funding to the Roadsector in Uganda. As a result, we envisage an increase in publicinfrastructure spending which is expected to support economic growthin the second half of 2017.

THANK YOU FOR YOUR ATTENTION

Questions &

Answers

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