Mashonaland Holdings decries Harare CBD property decay
MASHONALAND Holdings says dilapidated property owners in downtown Harare, are frustrating efforts of urban renewal, as they continue to hold on to properties sometimes without immediate plans of using them.
The property development firm along with other players have cited intentions to obtain and refurbish some of the old buildings in downtown Harare for various uses including occupation by small-scale business operators.
Urban renewal refers to a land redevelopment programme often used to address urban decay in cities. It involves the clearing out of blighted areas in inner cities to clear out slums and create opportunities for higher-class housing, businesses and other developments.
Downtown Harare has lately become an eyesore, comprising archaic and unfit buildings that can only do better if rehabilitated.
Some of the buildings qualify to be condemned but the current owners inconsiderately keep holding onto the derelict properties.
According to Mashonaland Holdings some property owners are even going to the extent of charging inappropriately high prices just to hold onto the buildings apparently for sentimental reasons.
This is, however, coming at a cost to the capital city’s appeal, which continues to downgrade in terms of standards partly because of the neglected properties.
Absurdly, this has led to a massive exodus of corporates from the Central Business District (CBD), preferring to set their office spaces and head offices in suburbs proximate to the CBD.
Urban Renewal works because it stimulates a cycle of private investment by removing the blighted conditions that act as a barrier to new development.
This is happening at a time when Mashonaland Holdings is carrying out a portfolio diversification programme that aims to come up with a more balanced portfolio.
In five years’ time, the property firm intends to reduce CBD office space to 29 percent from the present 55 percent of the portfolio, in the period the firm will grow the office park space to 23 percent and retail space to 18 percent.
Mashonaland Holdings’ current portfolio structure is dominated by office space at 55 percent followed by Industrial at 12 percent, retail at seven percent while residential and health comprise eight percent apiece.
“We have learned about SMEs and we would like to do more but the challenge has been getting into downtown but we would very much want to get into downtown. We are now looking at going downtown, again getting land downtown or dilapidated properties for redevelopment has been a big challenge and this is affecting urban renewal.
“Most of those properties are owned by Indians and they do not believe in market evaluation, their evaluation is emotional, with reasons like, I raised my family at that property you cannot buy it at US$300 000, if you are not talking US$1, 2 million you are not getting it,” said Gibson Mapfidza, Mashonaland Holdings chief executive officer, during an analyst briefing.
He, however, indicated that stakeholders in the property sector had long engaged the city authorities so as to concoct a way forward to realise the urban renewal goal.
“We have escalated this to City of Harare, in some jurisdictions the city will then talk to policies and allow compulsory acquisition. The City will do its own market valuation and property owners are given a price range, or the property is compulsorily acquired by the council and availed to those willing to really invest,” he added.
Mapfidza noted that the intended portfolio diversification programme goals are expected in the next 3-5 years but indicated that the programme would move faster assuming the company gets access to cheaper capital but would in the meantime work within available means or disposal of non-core assets.
Regional property consultant, Kura Chihota, said the city council needs to come to the party and ensure that the central business district is always pristine.
Further imploring property owners to maintain the aesthetics of their properties if not willing to dispose of them.
“The city council should have a strong partnership with property owners in order to create an unblemished CBD. Property owners need to keep their properties attractive by always face-lifting the properties, painting, doing new shop front, also creating new smaller spaces that are friendly to small businesses.
“This will lead to an environment where there is a higher attraction for people and higher attraction means people can pay more rent,” said Chihota said.
Urban Renewal is an economic development tool used by local governments across the country, it is a method of economically revitalising areas of “blight” through public investments that stimulate private development.