Experts in the real estate sector say supply for warehousing space has remained limited resulting in a spike in demand.
Industrial activity has been on the increase following relaxation of Covid-19 restrictions, while improved agriculture and mining have also helped push demand for space.
The Africa Report, by Knight Frank, shows warehousing space has therefore remained in short supply in the country.
“In the industrial sector, demand remains strong but is largely unfulfilled due to limited supply. There have been no significant warehouse completions recently and most new developments are owner-occupied.
“The positivity in the sector is to an extent continuing to be tempered by power outages, low capitalisation, poor water supply and deteriorating infrastructure,” said Knight Frank.
While demand for industrial warehousing facilities has remained strong, the hyperinflationary environment and the depreciation of the Zimbabwean dollar, remain a concern for the sector.
Compared to regional peers, the residential segment Zimbabwe is the worst affected as disposable incomes continue to
decline due to inflation, while sellers are looking for foreign currency for their properties.
Unlike in neighbouring Zambia, where all property sectors are moving into a post-pandemic recovery phase, with the residential leasing market emerging as the most buoyant, domestic house hunters in Zimbabwe have been locked out of the market.
According to the Africa Report 2022 / 2023 by Knight Frank, which analyses trends across the region, sales in the residential market remain stagnant as sellers continue to insist on payments in US dollars, in response to the depreciating Zimbabwe dollar.
The Africa Report also highlights that demand has weakened with domestic buyers for the most part being locked out of the market due to their inability to make payments in US dollars although the diaspora have been unaffected and remain active in the market.
“Hyperinflation and foreign currency shortages are affecting economic stability, resulting in the erosion of real disposable incomes and hence negatively impacting confidence levels.
“The real estate market remains in limbo; however, the suburban office market remains buoyant due to ongoing relocation activity away from the CBD,” said Knight Frank Zimbabwe managing director Siza Masuku in the report.
The real estate gurus have noted suburban office space as an asset cluster to watch going forward with demand remaining high as voids are easily leased.
This comes as there has been a shift in office preference with businesses opting for office parks and suburban offices while voids have been on an increase in the central business district (CBD) segment.
With persistent issues regarding parking, street vendors and high levels of pollution, coupled with the increased rents, demand for CBD office space has fallen sharply, leaving voids of around 60 percent on average.
“Our data hints at the particularly high potential for office development in the Northern suburban areas,” said Knight Frank.