15 August 2017

Rwanda: Real Estate Dealers Call for More Affordable Office Space

Photo: New Times
An office operating from a building designated for residential purposes in Remera.

Four months after expiry of the first ultimatum by City of Kigali authorities for businesses operating in residential dwellings to vacate, at least half of the establishments that were slated to relocate in the first phase have moved.

In January this year, city authorities issued a three-month ultimatum for offices to vacate residential structures and move into designated areas in line with the city master plan.

Offices were targeted in phase one of the relocation plan, while the second phase targets bars, restaurants and religious establishments while the third phase will be concerning medical facilities like clinics, pharmacies and health centres.

During an interview with The New Times, Augustin Rwomushana, the director of the city's urban economic development unit, said that they received requests from different establishments seeking extension of deadline, which they considered on case-by-case basis.

"Not all businesses moved by the deadline. We received some requests and after thorough analysis, each business or office was given its deadline depending on the reasons given. Those who had no valid reasons were given a few more days. Over 40 businesses have already moved to designated places and more than 20 will be moving in a week's time," he said.

Asked about complaints from the business community concerning the exorbitantly high rental fees, Rwomushana said that the City of Kigali continues to engage commercial building owners to see how rental fees can be reduced to make the process easier.

"We have had discussion with several property owners and, so far, in some places such as the CHIC, MPEACE Plaza (Makuza building) and Kigali Heights, rates were reduced from an average of $20 per square metre to $15 which is still negotiable depending on the size of the business," he said.

Addressing the issue of those who had already paid rent on a long term basis, Rwomushana said that CoK has considered the issue and they had been given such firms more time and requested to move immediately at the end of utilising their payment.

Rwomushana said that, besides respecting the master plan, it was important for people to know that the decision to relocate businesses to commercial houses is not meant to harm business but assist people to work in more secure and conducive environment.

Space issues

The Managing Director of Century Real Estate, Charles Haba, said that though his company has seen a few of these businesses coming in as a result of the order, there were still issues. Century Real Estates manages property.

"We have experienced a number of inquiries for office space and a few have indeed come forward but the number has not been significant. There is not enough supply of mid-range offices that are ready for immediate occupation," he said.

Peter Lutwama of Plut Properties says that though the number of clients approaching his company for office space has significantly improved, there was still a challenge to find space that is affordable for most.

"It is a challenge for most businesses because residential areas provided more space and charged less as compared to the space that they have to move into now which is being priced per square metre. Most cannot afford it and have resorted to being parked in smaller spaces than they are accustomed to," he said.

However, Rwomushana said that, in most cases, it is a mindset issue, and that the directive does not mean that all offices should relocate to Central Business District.

"The issue here is that people are biased because they assume that moving from residential areas means moving to the city centre, which is inaccurate. There are commercial complexes in areas close to residential neighbourhoods," he said.

The City of Kigali has mapped 910 outlets across the city that are targeted for relocation.

With 517 businesses operating in residential houses, Gasabo hosts the biggest number, followed by Nyarugenge with 300 businesses.

In Kicukiro, only 95 businesses will be affected, according to city authorities.

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