Some businesses operating in Accra have come under financial strain as they vie for a piece of the city’s commercial real estate for their business activities.
In the quest for the perfect office or business space, many property owners are charging in dollars, although payable in cedis at the prevailing rate.
Maxwell Kwame Adu, manager of Good Me Tea House, located on the popular Oxford Street in Osu, had to search extensively before securing his current workspace, albeit at a cost of over $2,000 per month.
Despite the high rental charges, he was able to pay for six months after negotiating down from the initial offer of a year and a half with the property owner.
His concern, however, is that workspace rental prices are quoted in dollars, adding that his first month of operations has not received the needed patronage.
Maxwell Kwame Adu told Citi Business News in an interview that this has affected his ability to employ more workers due to the financial strain of coping with rent costs.
“Assuming I paid less than $2,000, it would have helped me promote my place because I would be doing marketing for people to get to know this place. Because of the $2,000 plus, it has made a lot of differences. As you can see, we are just two workers here, and it’s not easy. Assuming the place was less than the amount, then I might get more workers to get more people on board to even work and pay some people who are jobless. We would have been able to advertise, and everything would have been going on well, but it is not like that. We are still maintaining and managing just to get everything on track, but for the first month, it is not easy.
“$1 is even 14.30… how much more $2,000 plus. Let’s assume I paid $2,000 for it, that is GH₵28,000 [plus], but supposing it was in cedis, it wouldn’t be that much,” he added.
Stephen Baah, a shop attendant with 5G Technologies in Osu, also shared similar sentiments, lamenting the impact of dollarization on the cost of renting.
“For them charging in dollars, it is not good because the cedi is not stable. It goes up and down. If the cedi goes up, then it means your rent shoots up, so if you pay ‘x’ amount, then you pay times two, which can affect the capital for the work. You also have workers to pay,” he said.
Some property owners in Osu, who spoke to Citi Business News on condition of anonymity, mentioned that owning property in one of Accra’s prime areas has become a lucrative venture.
James Anane (not his real name) says he has been compelled to start charging in dollars due to the depreciation of the local currency.
“These people used to pay in cedis, but three years back, we made them pay in dollars. So now they pay in dollars, and they pay $600. It is because of the rise of the dollar. Things were going up, and almost all the stores here charge dollars.”
Citi Business News also explored prime areas like Airport City, uncovering different pricing structures such as charges per square meter.
At SSNIT Emporium, management of Haps Global Logistics, a company specializing in freight forwarding and customs brokerage, disclosed to Citi Business News that they paid GH₵200 per square meter per month for their 40-square-meter office space to be used for six months subject to renewal. This translates to GH₵8,000 per month. According to the company, 30% of their revenue goes into the payment of rent.
At Atlantic Towers, sources indicated that some businesses were billed $600 monthly for their occupied business space.
In East Legon, startups or entrepreneurs seeking business space can expect to pay a maximum of $40 per square meter.
Amidst the soaring rental costs for business operations, managing partner of SPH Properties, Cosmos Owusu Agyei, told Citi Business News about the increasing trend of entrepreneurs and startups opting for co-working spaces.
However, he cautioned that property owners might need to raise the cost per square meter due to escalating building material prices and Ghana’s economic situation.
“I could say things may go up a little but not so drastic because the dollar is taking care of whatever inflation people are experiencing and then also, there is also competition in the market, so you always want to be in a certain range so that you can get some clients for yourself as well,” he noted.