Our rentals are realistic: Old Mutual

Property giant opens shopping centre at Ngezi

Shame Makoshori, Chief Business Reporter

ZIMBABWE Stock Exchange (ZSE)-listed Old Mutual, the country’s largest life assurer and property owner, believes its office and industrial space rates are in line with market developments and assertions that it is plotting to push indigenous companies renting its properties out of business through high rates are inaccurate. Old Mutual owns some of the country’s biggest upmarket buildings and shopping malls, among them Westgate, the largest shopping centre with a total of 155 shops and 12 office organisations.
It also owns Borrowdale Brooke, Chitungwiza Shopping Complex, High Glen Shopping Centre, Eastgate Shopping Centre and Nkulumane, the largest shopping complex in Bulawayo, among other properties.
Last week, Old Mutual opened the US$2 million Ngezi Shopping Centre at Zimplats, the platinum mining giant.
The complex has already attracted big retail and banking giants, am-ong them, OK Zimbabwe Limited, Pelhams and Stan-bic Bank.
But a significant percentage of space in most of Old Mutual’s buildings has been deserted as tenants flee what they have described as high rentals at a time when capacity utilisation in companies is still low.
The Affirmative Action Group had been on Old Mutual’s throat, accusing the Lond-on and Johann-esburg Stock Exchange-listed giant of plotting to derail Zimbabwe’s controversial empowerment drive by hiking rates for indigenous companies.
In an interview with The Financial Gazette, Old Mutual’s head of property development, Chris Manyowa, said companies without capacity to pay rentals were indeed vacating office space.
“During hyperinflation, we had more occupancy in our buildings because companies would burn just US$1 and pay us six months’ rentals,” Manyowa said at the official opening of the Ngezi Shopping Centre on Friday.
“When we turned to multi-currencies, in my view, we (Old Mutual) came with a real rate.
“But some of our tenants did not have capacity because capacity utilisation is still low, this is reality. What we see in our buildings (today) is nothing unusual; it relates to the rate of capacity utilisation in companies.
“You will see that those that cannot pay are leaving. But our rates are market related,” the Old Mutual executive said.
Old Mutual’s prime rates are US$25 per square metre for industrial space, US$6 per square metre for office space and US$10 per square metre for the retail industry.
The insurance giant, has the largest life assurance operation in the country and owns Zimbabwe’s largest mortgage lender, CABS.
The British headquartered concern has interests varying between five and 15 percent in 85 percent of companies listed on the local bourse, as well as controlling interests — directly or indirectly — in a range of unlisted investments such as MBCA Bank.
Officially opening the Ngezi complex, Prime Minister Morgan Tsvan-girai said government had been impressed by the fact that Zimplats and Old Mutual had ignored Zimbabwe’s economic crisis and pressed ahead with the project.
“The fact that the core decisions, investments and development of the Ngezi Shopping Centre were carried out during the most difficult economic and political era in Zimbabwe’s history, stands as a credit to the commitment, creativity and vision of all those involved in this development,” said Tsvangirai.