eBusiness Weekly
Enacy Mapakame
The central business district (CBD) space has continued to weigh on the property sector with listed real estate companies looking at further diversifying portfolios or paying more attention towards retail and residential segments.
First Mutual Properties (FMP), FBC Holdings Limited and Mashonaland Holdings have all concurred the CBD office space being depressed while the residential market remains a lucrative segment with firm demand.
“The property occupier sub-market continues to suffer from the high voids in the CBD office sector due to sluggish economic activity,” said Mashonaland Holdings in a trading update for the quarter to March 31, 2023.
The property market has not been spared from the challenging operating environment, as the same problems experienced in the prior year continued.
An estimated 60 percent of CBD office space was vacant as demand weakened during the period to December 31, 2021, experts have said, with businesses opting for office parks and suburban offices with houses in areas like Eastlea, Belvedere, Alexandra Park and Belgravia being converted to offices.
For the period to December 31, 2022, the country experienced high levels of inflation and foreign exchange rate volatility. The Zimbabwean dollar depreciated significantly against the US dollar, and annual inflation rose to 244 percent at year-end from 61 percent in December 2021.
Additionally, power supply disruptions continued to impact business operations negatively although efforts are being made however, to boost power generation through the construction of additional power generating units at Hwange.
In general, the property market fundamentals in Zimbabwe remained mixed in 2022
The leasing market for commercial space was the most active segment, with buoyant activity in the retail and industrial sectors. However, the office segment was subdued because of the need for people to readjust their newly-formed working habits from “working from home” to “back to the office”.
s such, the CBD office experienced the highest vacancy rates, forcing most owners to remodel their properties to cater to the SMEs sector.
Limited commercial property developments were seen during the period under review, largely due to huge investment requirements.
But the residential property market has remained active with a number of developments taking place across the market.
FMP chairman Elisha Moyo said the group will remain focused on delivering on its strategy despite the environmental uncertainty caused by global geopolitical tensions and a volatile and complex economic environment.
“This involves developing a sustainable and well-diversified business portfolio, delivering on new projects within budget, schedule and acceptable quality as well as creating value for all our stakeholders,” he said.
For FBC, group chief executive officer Dr John Mushayavanhu has indicated the group is participating in the residential space through the Building Society’s housing development projects as the segment has remained a viable hedge against inflation.
“The Building Society has increased its investment properties portfolio, which is strategically held to anchor capital and increase rental income generation,” said Dr Mushayavanhu.
