The United Nations children’s agency said “spiralling” Myanmar rents had put humanitarian budgets under pressure on Thursday as it confirmed it pays nearly $90,000 a month for its Yangon office.

UNICEF defended its spending and said real estate prices had risen steeply in the last three years, in a statement issued in response to media scrutiny of the Myanmar office’s rental rate.

“Escalating costs have meant new challenges in meeting the needs of the population,” said Myanmar representative Bertrand Bainvel in the release.

“In particular spiralling real estate prices in Yangon, have put a strain on UNICEF resources as UNICEF’s rents have nearly doubled in the past three years.”

Responding to a report by the Irrawaddy news website that UNICEF had rented its offices from former junta-era agriculture minister Nyunt Tin, Bainvel said a member of the landlady’s family was “once a member of the previous military regime”.

But he said the official was not subject to criminal charges or international sanctions.

Bainvel confirmed that the organisation was paying a “steep” $87,000 per month for its compound in a leafy upmarket suburb of Yangon, fixed for seven years.

He said this was after an “extensive” search for other options after UNICEF was asked to vacate a prominent downtown hotel where the group had been paying $45,000 a month for 130 staff.

Bainvel added that other international agencies had to pay “considerably more” per square foot for their offices.

Property prices in Yangon have soared as demand vastly outstripped supply as the country opened to the world.

Dramatic reforms since 2011 under a quasi-civilian government led by President Thein Sein, a former general, has spurred the removal of most Western sanctions and lured foreign businesses.

Aid groups have also sought to increase their presence as a response to the changes.

Sources in the UN and the property market say several UN offices in the city have rents of tens of thousands of dollars a month, including a large complex housing the World Health Organisation.

Former junta figures and business cronies have a dominant role in Yangon real estate because of the wealth they accumulated due to their regime connections and property agents say it is difficult not to rent from them.