Businesses count losses as rent pressures mount at MIC Plaza

Tenants at MIC Plaza, a major commercial complex in Kigali, are raising concerns over sharp and unpredictable rent increases, saying the trend is forcing businesses to shut down and driving customers away from one of the city’s busiest trading hubs. Several traders who spoke to The New Times described frequent rent hikes, often by as much as Rwf50,000 at a time and introduced with little or no notice and, in many cases, without formal rental contracts. Beyond rent, tenants say they are required to pay for electricity, water, security and maintenance, further straining already thin profit margins. ALSO READ: How co-renting is unlocking affordable entrepreneurship in Kigali Morgan Ingabire, a lash technician and former tenant, said her rent increased sharply within a single year, ultimately forcing her to leave the plaza and opt for a shared workspace. “When we started early last year, we were paying Rwf250,000 per month. By the time we moved out in November, it had increased to Rwf400,000, depending on the size of the space,” she said. “Clients are no longer coming the way they used to. Business has slowed because many shops are closing, and more tenants are moving out every day.” Another trader, Jean Damour Manirere, 32, linked the rent hikes to changes in ownership at the complex. ALSO READ: Young entrepreneurs urged to drive lasting social impact He explained that tenants renting directly from MIC appear to have more protection, while those whose units have been sold to private landlords face steeper and more abrupt increases. “Once we were assigned new landlords early last year, the problems began. Rent increases would be imposed suddenly, without prior notice or time to prepare,” Manirere said. “The same applies to electricity bills, which are often high and communicated abruptly. Tenants are simply told how much they owe after someone checks the system we do not have access to.” The impact is increasingly visible across the plaza. Innocent Rutayisire, who manages several units on behalf of landlords, said many shops are now vacant as tenants continue to move out. “Most shops are closed and empty. People are moving out,” he said, adding that in some cases rent has recently been reduced by about Rwf30,000 in an attempt to retain tenants. ALSO READ: SMEs solving youth unemployment in Rwanda Rutayisire, who declined to disclose rental prices for the units he manages, said his role is limited to communicating landlords’ decisions to tenants. He noted that he is often not informed of the reasons behind sudden rent increases or reductions. MIC officials, however, said rental prices vary depending on factors such as floor location and unit size, with ground-floor spaces typically costing more. They added that MIC only manages units it still owns, while those sold to private buyers are fully controlled by individual landlords. “When someone buys a unit, they manage it independently. We do not intervene, except in matters related to electricity, as there is a single common cash power system,” said an official who requested anonymity. ALSO READ: New study reveals 71% of Rwandan youth aspire to start businesses Bosco Kalisa, an economist and one of the landlords at MIC Plaza, said rising rent in commercial hubs should be viewed as part of broader structural changes in Rwanda’s economy. He noted that the shift from a predominantly rural economy to a more urban, service- and industry-driven one is reshaping property markets. “Quality jobs are increasingly found in the industrial and services sectors, including tourism and hospitality. These activities are concentrated in urban centres where amenities exist, which naturally pushes up demand for commercial space,” he said. Kalisa added that the conversion of some residential buildings into business premises particularly in tourist and expatriate areas has helped contain even steeper price increases. “If that had not happened, we would likely be seeing much faster increases in building and rental costs. Compared to cities like Nairobi, construction costs here are still relatively low, but as urbanisation accelerates, rental costs will inevitably rise, potentially at an exponential rate,” he said. While acknowledging market pressures, Kalisa stressed the importance of predictable and negotiated rent adjustments. Drawing from his experience as a landlord, he said structured agreements help protect both parties. “With my tenant, we agreed on an annual increment of 10 per cent to account for inflation. That is something both sides can plan for,” he said. “Unless there is a major upgrade or expansion, increases of between 10 and 20 per cent are generally reasonable. When hikes go far beyond that, there is a real issue that needs scrutiny.” The Private Sector Federation (PSF) has acknowledged the complaints but described the issue as part of broader market dynamics. Acting spokesperson Williams Buningwire said rent adjustments are influenced by factors such as inflation and operating costs faced by building owners. “From our perspective, what is required is negotiation between tenants and landlords,” he said. “Rent adjustments are part of an economic transaction, and prices can either go up or down depending on prevailing conditions.” Buningwire noted that broader economic factors, including rising utility costs, often influence rental prices and do not necessarily reflect deliberate targeting of tenants. “This is an economic reality that should ideally be resolved through dialogue between shop owners and building owners,” he said. While acknowledging concerns over sudden rent hikes, he added that PSF’s role is primarily advocacy and mediation rather than regulation. “Guidelines can exist, but negotiation must remain at the forefront. Building owners also face costs, including electricity and water. Our role is to help strike a balance by encouraging engagement and fair discussions in all situations,” he said.

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Businesses count losses as rent pressures mount at MIC Plaza