Like many of his peers in the real estate industry, Phillip Gatete has had to contend with the rapid shift in the way sector issues, especially investment and property management, are handled.
“Back in the day, things were done informally. You just bought your house or land without consulting an expert. If you had rentals, you requested a relative living nearby to manage it for you. Those days, property developers were prone to bad investment and losses as a result,” Gatete points out.
But times have changed. “Today, real estate investors have to engage valuers, property managers and agents and consultants to ensure that the projects are financially viable,” Sayinzoga Nkongoli, a real estate consultant and a property valuer, says.
He adds that when he was starting up as an engineer, people bad investment decisions were common as there were no experts to consult.
“The real estate market is complex; it is not only about an investor simply developing an idle piece of land, it is getting maximum value from the investment,” Sayinzoga notes.
He points out that due to lack of involvement of professionals in the past, many commercial buildings in the city do not attract tenants despite their fancy designs. He notes that at times minor adjustments like location of parking lots or where the building faces can affect a building’s competitiveness.
However, the situation is changing, according to Mercy Uwamahoro, a real estate consultant.
“The same way people visit physicians when they are ill, or a lawyer when they have a legal matter, people are now consulting real estate professionals when making decisions,” she says.
Real estate firms appraise the property to make it competitive. “They help clients to benefit from the property at a minimal fee,” Uwamahoro adds. Most real estate firms are engaged in brokerage, and also manage properties on behalf of clients.
“Most buildings are well designed and priced, but poorly managed. This could mean that tenants are always complaining about things like drainage problems, poor lighting and unreliable security. And because the landlords are busy elsewhere or out of the country, the tenants at times move to better places if the problems are not fixed,” Sayinzoga points out.
According to him, that is why most tenants in commercial properties prefer to deal with agents rather than landlords. “Agents are professional and easy to access,” he argues.
“I do not have to worry about management of my building. I hire an agency to do that, they do everything – get tenants and maintain it – and deposit the rent money on my bank account as agreed,” Emma Nyishimana, a property owner in Kigali, says.
The sector has also had new entrants among them property developers, which was not common in the past. Today, there are large-scale developers, who are interested in setting up estates and small-scale ones, who mostly focus on building single units.
The Rwanda Development Board statistics indicate that by 2010 the sector had grown to about $500m with most of the investors based out of Rwanda.
According to analysts, most of the emerging trends can be attributed to demand that has been created by the expanding middle-class, with disposable income to service mortgages.
“This emerging middle-class desires and demands quality infrastructure, they want well-designed properties with great finishing in secure locations, and which are financially viable in the future. They are willing and able to pay,” they add.
Foreign investments, multinationals and NGOs have also been linked to changes in the sector just like increased Diaspora investments in the local property markets. Real estate professionals said the government investments in infrastructure expansion and modernisation and the myriad of opportunities in the sector were some of the factors influencing this change.
“Positive economic outlook and an appetite for investment are enough to support a dynamic property industry,” they say.
The growth has even led to the instituting of a course on estate management at a local institute of higher learning, Kigali Institute of Science and Technology.
Though the real estate sector is slowly coming of age, it has not been without setbacks.
“There is a wait-and-see attitude among some investors or an assumption that the services are as a luxury,” Uwamahoro says.
“Hiring professionals is costly, so it is very tempting to develop your property without consulting professionals and also manage it yourself,” Gatete notes.
The New Times
