Mbarara Northern Bypass Land Prices Rise as Investors Target Hotels, Factories

Land prices along Mbarara City’s Northern Bypass have risen sharply as the corridor emerges as a target for hospitality, commercial and industrial investment under the city’s physical development plan.

Once characterised by stretches of farmland, the bypass is attracting growing investor interest, with city authorities saying planned land use and improved road access are shaping development in Mbarara’s North Division.

Mbarara City Council Speaker Bonny Tashobya said the zoning framework was intended to guide orderly growth while giving investors greater certainty about the area’s future.

“The road network of Mbarara City North is much clearer now, and that clarity naturally comes with rapid development,” Tashobya said.

“Designating the Northern Bypass as a hospitality industry area gives investors confidence and sets a clear direction for the city’s expansion,” he added.

Mbarara City physical planner Carol Warugaba said the city’s land use includes institutional, residential and commercial areas, with the Northern Bypass offering potential for industrial development.

“We have Kihumuro, an institutional land use, but there are other land uses that complement that institutional land use, and these land uses are residential, commercial, and we are also in this new PDP, which we are reviewing, which is industrialisation,” Warugaba said.

The city is reviewing its physical development plan to guide future expansion and determine how different areas should be used.

The changing land-use outlook has coincided with a rise in property prices along the bypass. Tashobya said a plot measuring 50 feet by 100 feet, which was previously more affordable, now costs at least Shs60 million.

“Land along the Northern Bypass has shot up significantly. A 50ft by 100ft plot that used to be affordable is now costing Shs60 million and above,” he said.

“The demand is unprecedented, and real estate developers are treating land in this area like hot cake,” he added.

Warugaba said authorities were also enforcing minimum plot-size requirements in some areas to manage development and preserve land for designated uses.

“In some areas they are passing a strict law to have only 100ft by 100ft plots of land, and Northern Bypass, Biharwe, Nyakayojo are some of the areas due to their designation as industry areas,” she said.

Beyond hotels, apartments and recreational facilities, the corridor could accommodate larger developments because some sizeable tracts of land remain available for factories and manufacturing facilities.

Real estate developer Herbert Tushabe attributed rising land prices partly to population growth and increased demand from buyers both within and outside Mbarara.

“The growth in population has led to the demand of land and increase in price,” Tushabe said.

He said interest was not limited to local residents, with investors also looking for land on which to establish large factories along the bypass.

“Not just people of Mbarara, no, we have people from all over and they want land. Investors want to establish big factories along the bypass, so no wonder they desire to get land along the Northern Bypass,” he said.

Tashobya said Mbarara’s North Division still had sizeable areas available for investment, unlike parts of the South Division where land has been more extensively subdivided for residential use.

“The North still has more land to invest in. When one wants to construct, say, a hotel, Mbarara City North and particularly the Northern Bypass is still a real deal. People have not fragmented the land for residential purposes like it is in the South Division,” he said.

As Mbarara expands as a commercial centre for western Uganda, the Northern Bypass is becoming an important corridor for planned urban growth.

However, the pace and sustainability of development will depend on how the city balances investor demand with land-use regulation and infrastructure provision.