Kigali investment Company, the new owners of Union Trade Centre now renamed Kigali City Mall, have reduced rent costs by half in a bid to reclaim tenants in the city’s increasingly tough commercial rental market.
Occupancy reduced when many premium tenants relocated from the mall earlier this year when the former statutory manager raised rent to $40 a square metre. This triggered an exodus to newer properties in the central business district — a factor that could have played a role in reducing the value of the mall, which was sold for $6 million.
Kigali Investment Company is now offering prime retail space at $20 a square metre. Some premium tenants such as MTN, which had moved its service centre to MIC building, have come back.
In addition the telecom giant recently announced that it will be moving its service centre previously at Rubangura’s building to Kigali City Mall.
In July, the Abandoned Properties Management Commission, which was managing the property that previously belonged to exiled tycoon Tribert Ayabatwa Rujugiro, nearly doubled the monthly tariff when it increased the cost of a square metre from an average of $25sq metre to $40sq metre.
The mall was auctioned in October over unfulfilled tax obligations. It had been under statutory management when the Rwanda Revenue Authority filed a $1.5 million tax bill and an equivalent amount in fines against Mr Rujigiro.
Foot traffic is still low and tenants are struggling because only part of the 4,300sq property is occupied.
James Rudasingwa, the Kigali Investment Company’s spokesperson, dismissed suggestions that price cut was driven by an oversupplied market.
“We currently feel no pressure from competitors because some tenants are relocating from other buildings and coming to take up space here,” he said.
But, he did not rule out the possibility of a glut in the property market in the near future.
More than 20,000 square metres currently being built will become available in the next one year.