IPAR: Here’s how Kigali can improve its commercial real estate sector performance

New findings reveal that the occupancy rate in Kigali city's commercial buildings currently stands at an impressive 85 percent. However, there are still challenges hindering the full viability of the commercial real estate sector. Dickson Malunda, a Senior Research Fellow at the Institute of Policy Analysis and Research (IPAR), shared insights on the critical factors affecting the success of commercial real estate markets. From zoning regulations to financing sources and target client considerations, the study highlights essential aspects that can enhance the performance of Kigali's commercial real estate sector. The city's approach to regulations and construction guidelines plays a crucial role in shaping the costs, rents, and overall attractiveness of commercial properties. The introduction of flexible regulations, such as incremental construction and mixed-use zoning, can provide developers with more financial agility and reduce pressure on occupancy rates and rents. Moreover, catering to the needs of small to medium enterprises (SMEs) in the building design and pricing strategies is essential to ensure sustainable occupancy rates and business growth. Quality and design of buildings also emerge as key factors influencing tenant decisions, emphasizing the importance of proximity to clients and the prestige associated with a commercial space. Recognizing the significance of policies in supporting the sector, recommendations include the implementation of flexible zoning regulations and guidelines for incremental construction. By aligning regulations with the diverse needs of businesses and prioritizing SME-friendly approaches, Kigali can further boost commercial real estate investments and occupancy rates. Despite the current impressive occupancy rate, disparities exist across different areas of the city, suggesting the need for targeted strategies to optimize space utilization and stimulate business growth. With ongoing developments in the pipeline, enhancing business-friendly policies and promoting investment in high-quality, customer-centric constructions will be vital to sustain and improve the performance of Kigali's commercial real estate sector. The collaborative efforts of policymakers, regulators, and industry stakeholders are crucial in creating an enabling environment for continued growth and investment in the sector.