Mashonaland Holdings managing executive Gibson Mapfidza says Zimbabwe is a hub of opportunities for property investment despite the country’s macroeconomic challenges, which remain well documented.
Mapfidza’s comments come ahead of the second annual ZimReal Property Forum scheduled for 17 July 2019, which will welcome 300 leading local and regional investors and developers eyeing current and future opportunities in a property sector ripe for innovation.
He noted that the development submarket remains subdued due to lethargic economic growth, arguing that Zimbabwe’s real estate sector shall have to redevelop regardless, as current building stock is outdated and too expensive to upgrade.
“The property market abounds with pockets of high yielding opportunities,” he said.
In a market where freehold sales remain depressed; landlords have adopted aggressive rent review strategies in order to preserve assets value and hedge income streams against currency inflation
“Investment property owners have sought to preserve value through rent reviews from January 2019. On average the industry achieved reviews ranging from 30 – 80 % depending with location, size of leased premises, the grade of building and quality of tenants,” he says.
Despite the current operating environment, Mapfidza is confident that the government’s Transitional and Stabilization Policy (TSP), if implemented in full, will lead to green shoots of recovery and sustained growth in the sector.
“The TSP by the government, aimed chiefly at reducing fiscal deficit to restore macroeconomic stability, while maintaining investment infrastructure and priority social spending, among other necessary interventions, seems to be taking the economy in the right direction and fruits are expected to show in the medium to long term.”
In addition, he noted that new and appealing development corridors have emerged as corporate occupiers continue to exit the CBD for various reasons.
“There is a general consensus that the property market lacks quality buildings providing the required functionality and operational efficiency for the modern corporate occupiers,” added Mapfidza.
In his view; the revitalization of Harare, as communicated recently by the City of Harare’s gazetting of Local Plan Number 39 in May 2015, which converted Avondale and parts of Alexander Park from a dominantly residential to a commercial district, provides the impetus to redevelop.
In addition to the actual buildings, there is an opportunity to upgrade the bulky infrastructure services to suit the new uses.
Added Mapfidza, “This presents a good opportunity for bulk infrastructure (sewer, water, roads) investments if the Local Planning Authority puts in place an enabling framework to attract private sector investment in this sector previously dominated by the local government.”
While this is a departure from the traditional model employed in Zimbabwe, Mapfidza’s view is that urban land use changes to suit dynamic business and citizens occupying space requirements like the Local Plan Number 39 will jumpstart development within the sector, provide jobs and bring in the much needed FDI investment.
“The change of use presents an opportunity to develop modern office park buildings that are highly energy efficient – retrofitting old buildings to improve their greening credentials has proved very costly.”
