Alemayehu Befikadu, a deputy manager for a plastics manufacturing factory, was busy organising a demonstration by tenants against rent hikes on a commercial property owned by the Federal Housing Corporation on Monday, December 17, 2018.

A graduate of economics and information technology in his early 30s, he was protesting in support of a firm where he works. The firm which was recently notified of an 11-fold rent increase that put the fee at a whopping 37,680 Br a month. It was not something that he and his co-workers were willing to accept.

“Volunteer friends and I circulated the news on Viber and Facebook, and a day later, we had 3,000 people registered,” said Alemayehu.

After holding an initial meeting between representatives of the tenants, they agreed to demonstrate at the head office of the Corporation last Monday, December 24, 2018, in Leghar.

And demonstrate they did. Beginning at 9:00am, a flock of indignant tenants made their way to the Corporation’s head office. An hour later, the building was surrounded in all directions with crowds eager to hear good news from representatives that had been allowed inside the compound.

At a little past 10:00am, representatives streamed out after their meeting with Reshad Kemal, director of the Corporation, to announce that an understanding has been reached.

“He proposed to meet all the tenants on January 3, 2019, after conferring with the management of the Corporation,” Alemayehu told Fortune. “The time and place of the meeting will be communicated through media outlets.”

Not everyone was satisfied with the Corporation’s response, saying they need something concrete right there and then, but the gathering broke up as the protesters dispersed eventually.

The crux of the demonstrators’ demands is that the Corporation should have discussed the rental hikes with the tenants. They reject prior discussion the Corporation held with tenants at the Capital Hotel saying that it was attended by only a handful of tenants.

They also reason that their rental fees should not be based on market prices, since tenants in most private commercial properties have better facilities, including lifts, generators and parking lots. The tenants also raised the conditions of the buildings to be taken into consideration as well as the type of business being conducted in the units.

This view is considered misguided by the Corporation.

“Parameters such as the convenience of the units for businesses, its condition, and the effective area of the property that is used for the business were taken into consideration,” said Kibrom Gebremedhin, director of communication affairs at the Corporation. “Regarding the market price, we didn't use it to set the rental fee directly but to make comparisons.”

A survey on commercial rental rates for private businesses in what the Addis Abeba City Administration considers central business districts - Merkato, Piassa, Bole, Stadium and Megenagna - shows price variations based on conveniences, conditions of the facilities and age of the building.

The current average market price for a square metre of floor space is 560 Br in Merkato, 800 Br in Piassa, 950 Br in Bole and 584 Br in Megenagna. These prices do not include the rental fees for cubicles within the buildings, which can range from 3,000 Br to 4,000 Br a month.