BUSINESSES and non-profit organisations operating from buildings designated for residential purposes have until March to relocate to commercial complexes, the City of Kigali has directed.
Thousands of businesses and non-governmental organisations (NGOs) operate from residential premises, according to City authorities.
Parfait Busabizwa, the City vice mayor in charge of economic development, told The New Times yesterday that all those businesses have been informed and they have three months effective January 1 to have relocated or face closure.
“We have written to them and given them three months to relocate from residential houses and we requested commercial building owners to reduce the rental fees to make it affordable for the tenants,” Busabizwa said.
He said unlike before, there is enough office space for all businesses and there should not be any reason for them to remain in residential dwellings, which not only inconveniences their clientele, but also contravenes the city master plan.
“There are enough commercial buildings and others are coming up and will be completed within the set deadline, the city will close up all offices operating in residential buildings once they do not respect the directive to relocate,” Busabizwa added.
Investors in real estate have complained of low levels of occupancy in the different modern commercial complexes for both business and office purposes, saying most businesses prefer the cheaper residential buildings.
This left the investors, most of whom develop such complexes on loans from financial institutions, counting losses while on the other hand, residential houses have remained out of reach for those looking for abode.
The City officials cited cases investments such as Kigali Heights, CHIC Complex, M. Peace Plaza, towers built by Rwanda Social Security (RSSB), among others, that they say are not fully occupied.
According to a realtor well versed with the matter, between these commercial buildings in Kigali are over 30,000 square metres not occupied.
Busabizwa said even those that modified their residential homes into offices will not be spared, adding that unless one transformed the house into a fully-fledged commercial building.
Concerning the preferred price by the City authorities, Busabizwa said depending on the location, they think the price should be at least $15 per square metre.
Tenants speak out
Donatile Kanimba, the executive director of Rwanda Union of the Blind (RUB), said the move by the City to order relocation from residential buildings to commercial ones does not favour some institutions, citing NGOs.
Kanimba said, for years, RUB incurred costs in rental charges in commercial buildings until last year when they secured money and bought their own residential structure that they thought suited the staff and activities being run by the Union.
RUB currently operates from their premises along the Kinamba-Nyabugogo road.
“We were paying a lot in rent, over Rwf550,000 per month. We realised we could not afford paying that money forever. We secured funding and bought a house from where we are currently operating, it is bad news if the City wants us to relocate,” she said.
Kanimba added that just like other NGOs that entirely depend on donor funding, it would be hard for them to afford to pay unless the city thinks about ways to lower rental cost in complexes.
As businesses and other offices operating in domiciles grumbled over the City directive, developers and realtors were grinning from ear to ear, saying the move will leave more unoccupied offices taken and help owners service loans.
“This is very good news for all the developers. There is quite a lot of unoccupied office spaces, there’s also a number of upcoming commercial properties. These developers were supported by the Government, the same developer acquired financing which can only be paid if the buildings are occupied,” Paul Rwigamba, the director of commercial and residential realtor at Century Real Estate, said.
Century Real Estate manages a number of complexes in the city, including the Kacyiru-based Kigali Heights.
He said as a realtor, the prices are fair, stressing that it depends on the location and the service provided by the developers.
The rental average is $17 per square metre and rental prices in the Central Business District (CBD) ranges between $15 and $20 per square metre, he said.
Rwigamba predicted that once businesses vacate residential houses, the rental charges for the next occupants is likely to be lower for those seeking domicile.
“This a market trend on which we don’t have control but once they (offices) vacate from the buildings, they will be occupied by city dwellers and of course rent charges will not be the same, this is bad for owners but all cannot be positive, what is necessary is that each building serves its purpose,” Rwigamba said.