Hundreds of offices in residential areas could be closed and traders operating in condemned buildings forced to relocate to new commercial properties as property owners come under pressure to enforce the Kigali Master Plan, which zones areas for specific businesses.

Some of the properties reporting low occupancy are M-Peace Plaza, Champion Investment Corporation, Kigali Heights and Kigali Down Town.

This has affected revenue flows, exposing some banks that financed the projects to liquidity concerns.

“The occupancy rate at Chic is at 55 per cent,” said Olivier Mpazimpaka, managing director at Chic.

“The government and City of Kigali should rein in traders still operating in Matheus,” he said.

Kigali City authority was to encourage traders operating at Quarities Matheus to take up space at Chic, Kigali Downtown, Remera and Gisozi.

When Kigali City Tower management was struggling to attract clients shortly after the building was completed in 2011, the developers appealed to city authorities to enforce the city master plan.

“Offices occupying residential areas means bedrooms are converted into boardrooms and kitchens into receptions, which makes it all ugly and an abuse to proper estate planning, said Daniel Kamau at executive director real estate at Fusion Capital.

Fusion Capital has invested about $40 million (Rwf32billion) in the 30,000 square metres Kigali Heights. While 100 per cent of this retail space of this grade A property has been let, office space is at 52 per cent.

Property agents say many buildings in the city do not meet the tastes of many UN agencies and NGOs. What is more, buildings are constrained by limited parking slots for tenants and visitors, an inconvenience many NGOs and UN agencies try to avoid.

“When NGOs and UN agencies are looking for a house, they look for property with parking capacity of at least 10 cars,’’ a property agent said.

The residential areas have remained competitive on pricing as the developers charge for lump sum and not per square metre.

Another factor that is slowing the uptake of office space in Kigali, Charles Haba managing director of Century Real Estate, told Rwanda Today is the concentration of the properties in the middle of the central business district, which discourages many tenants.

More property developers are being urged to build on the outskirts of Kigali as those areas have impressive booking rates.