eBusiness Weekly
Enacy Mapakame
The year 2022 was a hive of activity for the real estate sector with the capital city — Harare — witnessing world-class property developments. During the second half of 2022, the capital city had several properties officially opening doors to the public.
Key among them are Terrace Africa’s Highland Park and Chinamano Corner that opened in July and September respectively.
The property developer also added Madokero Mall to its sleeve — another world class development opened in December.
This comes as there has been a growing trend in Zimbabwe with a shift from the central business district (CBD) towards office parks and suburban offices as businesses leave the CBD space due to various reasons among them to dodge pollution, poor and dilapidated infrastructure which can no longer cope with the growing day and night population as well as high traffic congestion.
Another trend witnessed in the country is development of world-class properties along major roads like Airport Road, ED Mnangagwa (formerly Enterprise Road) Kirkman Drive, Lomagundi and Samora Machel.
As one of the developers, Terrace Africa has indicated plans to contribute towards the transformation of Zimbabwe’s real estate sector with a vast project pipeline in place.
The group is targeting mainly retail and commercial segments in line with prevailing market trends. This comes as there is strong demand for retail space both in central business district (CBD) and suburban space driven mainly by the budding small to medium enterprises (SMEs).
Bigger retail groups and premium brands are skewed towards shopping centres in suburban areas while office parks are preferred by small businesses.
One of the projects is the development of a world class shopping centre at the Show Grounds area, along Samora Machel.
Terrace Africa managing director, Brett Abrahamse, said opportunities were vast for retail and commercial segments and the Showgrounds project will boast world class facilities.
“We have quite an exciting pipeline as Terrace Africa, not all of them will be going to the REITs, but we are working on exciting projects,” he said.
Since the Covid-19 pandemic hit the country, there has been a general supply/ demand imbalance in the CBD office segment sector which saw corporates adopting remote working while the reduced economic activities across sectors also added to the woes.
CBD office space has remained affected. Resultantly, rental incomes were also affected although property owners adopted quarterly rental reviews as a cushion against inflationary pressures.
Rentals across segments were also predominantly indexed to foreign currency as landlords sought to preserve value of cash flows. Another trend during the year was the growing demand for retail space in the CBD by small holder businesses with businesses repurposing their properties in the CBD in to smaller partitions to cater for selling space by small to medium enterprises.
The trend is not unique to Harare alone. Partner at Knight Frank Southern Region, Sithembinkosi Mbavhumana, told a ZimReal conference that the retail segment presented lucrative opportunities with high demand from the market. He said demand for retail space in Bulawayo for instance was high, with some industrial spaces already being converted for retail.
The non-availability of formal employment due to Covid-19 challenges, for instance has seen most people want to start a retail business selling various commodities and landlords have capitalised on this trend.
“Those who want to invest should move into retail. Demand is especially high for smaller units to cater for the growing SMEs.
“Those with large spaces can re-partition to cater for SME retail businesses. There is high revenue potential in this segment,” he said.
However, other experts in the sector highlighted demand for retail warehousing, light industrial properties and office park properties remained strong.
During the year, the residential sector development activity also remained firm mainly supported by the informal sector of the economy and the diaspora community.
Construction related companies have also cashed in on the increased developments which have seen demand for cement and bricks remain solid.
Going into 2023, the sector still remains one of the most lucrative investment options in Zimbabwe offering real returns, despite the obtaining economic headwinds.
Since time immemorial, real estate has always been a safe haven for investment during uncertain periods and a perfect hedge against inflationary pressures for instance.
Market watchers say the real estate still offers great opportunities and “peace of mind” for both individual and corporate investors. The retail, hospitality, student accommodation and office parks segments are among the top picks while the central business district (CBD) has been rated the least attractive segment currently, evidenced by growing voids of recent.
“Investment in the real estate remains viable,” said Robert Mutakwa, general manager ZB Bank Transfer Secretaries.
“We are seeing a trend where land bank acquisitions and developments are being pursued vigorously,” he said at the ZimReal conference.
