Office space shortage: Talking business over a drink

Friday May 10 2013


Ronnie Mulisa, chief executive officer of the Kangaroo Transport Agency, has turned bars and restaurants into his office, where he seals business deals.

Mr Mulisa says lack of office space in Kigali has forced him to camp in coffee shops and restaurants with Internet connections to transact business deals.

The most popular places for investors with no offices are the Bourbon Coffee outlet at Kigali International Airport, MTN Centre in Nyarutarama, Kigali City Towers and Union Trade Centre.

“You only need a cup of coffee or a bottle of water to access Internet,” said Mr Mulisa, adding that they are strategically located for a businessman.

It is common to find people glued to their laptops and smartphones in Kigali coffee shops and restaurants for hours.

What makes these places popular, according to Mr Mulisa, is free Internet connection and relatively affordable drinks and food.

Other places, where business deals are routinely sealed are Blues café, Simba Café in the heart of Kigali and Economat Supermarket near St Family Catholic Parish in the central business district.

Mr Mulisa is among hundreds of CEOs in Rwanda who would have wished to rent offices, but the shortage of space coupled with high costs have locked them out.

Besides the general shortage of housing in the country, which has condemned some of the middle and low income earners to living in unplanned houses, there is also an acute shortage of office space, following the rapid growth of the private sector in Rwanda.

But this has also compromised the quality of available office space in the market.

“When you have limited office space, rent will go up. If we had enough office space in Kigali, the rent would be moderate and attract more people,” said Lillian Mupende, director of urban planning at Kigali City Council.

To cash in on high demand for decent working space in the city, some homeowners have turned residential houses in Nyarutarama, Gaculiro, Kiyovu and Kimihura into offices.

The government has also been affected by the office shortage and is competing with the private sector for space.

Mr Mulisa said rents are not affordable, forcing most businessmen in Kigali use to coffee shops and restaurants to transact business.

The government recently bought a building that hosts the Rwanda Development Board to reduce shortage of office space among some departments and agencies.
The government demand for office space has been rising by 4,000 square metres each year since 2010, occasioned by expanded recruitment of new personnel.

According to some officials, the government could be spending Rwf4.7 billion in rent per year to house 35 agencies and three ministries.

Regus, a global virtual office provider, recently opened offices in Kigali to cash in on the demand.

“Regus has opened its first business centre in Kigali to keep pace with rising demand for flexible workspaces in East Africa,” said Peter Vieira, Regus country manager for East Africa.

In Kigali, a one-man work station at $19 per month, while a fully furnished and serviced office solution goes for $395 per month.

Mr Viera attributed the opportunities that come with providing office space in Rwanda to what he called steady and consistent growth the country has registered over the past few years.

“With the costs linked to workspace representing between 5 and 10 per cent of a companies’ turnover, organisations of all sizes are increasingly looking at office space needs as a strategic component of their business plan and are examining which can be outsourced.

“This is a major evolution in the way companies think, confirmed by our recent survey stating that globally, 81 per cent of companies intend to cut or freeze their property or premises costs this year.” said Mr Viera.