Property skewed to residential

THE real estate sector in Zimbabwe has hit its lowest although opportunities still abound across the country’s major cities, experts say. Activity in the sector has been skewed towards residential developments, while commercial properties, especially in the central business district, have been experiencing high voids and low rental income.

Average occupancy level is estimated at 50 percent in the CBD, while rentals have gone down to an average $6 per square metre.

Although business in commercial properties has been going down, the retail sector has performed well relative to office space.

“Yields are falling and we are seeing a movement from the CBD to suburban areas,” said Zimre Property Investment (ZPI) chief executive officer Edson Muvingi at the Zimreal Property Investment Forum in the capital last week.

“Rentals have been going down in the CBD to $7, $6 or even $4 (per square metre). We are at the bottom now, but optimism is high, investment will increase,” he said.

Average yields are at plus or minus 8 percent.

However, there is hope for vast investments in the country’s cities. These range from an anticipated boom in housing projects for the middle class as Government is pushing for a middle-class economy by 2030 according to President Mnangagwa.

Major investments opportunities will also be in the tertiary institutions’ student accommodation, a programme that Government in partnership with financial institutions is working on to reduce the accommodation woes by both students and staff at tertiary institutions.

Mr Muvingi cited hotel projects, commercial properties in Borrowdale, industrial properties along the Masvingo Road as major investment opportunities for the city of Harare, while development of the new city in Mt Hampden is a major boost to the property sector and other downstream industries.

In Bulawayo, the revival of the National Railways of Zimbabwe (NRZ), Mr Muvingi said, would boost the city’s economy, also spurred by tourism.

Centrally located cities like Masvingo and Gweru have high potential in logistics and warehousing.

For Gweru, the resuscitation of the steel industry in the province would be a major boost to incomes and cascade to housing development projects.

Other cities such as Mutare and Victoria Falls already have the advantage of having tourist attraction.

“For Victoria Falls, its status as a special economic zone will open more investment for the resort town, which is a good thing for its economy,” said Mr Muvingi.