Property sector remains depressed

Property sector remains depressed
Jonas Mushosho, Old Mutual Rest of Africa chief executive officer (CEO) and Zimbabwe group CEO.

Jonas Mushosho, Old Mutual Rest of Africa chief executive officer (CEO) and Zimbabwe group CEO.

THE property sector continued to experience growth in voids during the second quarter of the year, despite a bull run on the equities market against the background of fears of an inflationary crisis due to the introduction of bond notes last year.
This means the situation was unchanged from the first quarter when the sector was reported to have come under the spell of a faltering economy.
According to a review of the quarter by Old Mutual Securities (OMSEC), the property market had been hit by a depressed economy, which has largely become informal.
OMSEC said demand for formal property space had continued to shrink during the review period.
“Property sector players who are able to adapt and provide properties that can service the needs of the informal sector are expected to yield better results. Given the lead time to renovate properties that service the informal sector better, we do not expect a turn-around in this sector in the short term,” said OMSEC, a unit of Old Mutual Zimbabwe.
In response to the changing dynamics in Zimbabwe’s economy, Old Mutual has invested in the construction of a centre that is specifically designed to meet the needs of the SMEs and the informal sector.
The Old Mutual SME Centre, which is situated opposite the Eastgate Mall in Harare, would be the first of its kind south of the Sahara, according to Jonas Mushosho, Old Mutual Rest of Africa chief executive officer (CEO) and Zimbabwe group CEO.
“We expect to complete the project in the first half of 2018. On completion, the project will have a lettable space of 12 000 square metres, bringing relief to an estimated 20,000 vendors who currently ply their trade at various informal sites across the city,” Mushosho said in an editorial piece for The Financial Gazette’s Top Companies Survey 2017.
He said of the available space, there would be up to 2 000m² of refrigeration space for rural farmers that would help preserve their produce and enhance their livelihoods.
This development would not only improve the competitiveness of SMEs, but also enable them to meaningfully contribute to the development of Zimbabwe’s economy.
In addition to the Old Mutual SME Centre, Old Mutual was granted in January a licence to operate a micro-finance business, leading to the launch of Old Mutual Finance.
The current situation in the property sector has forced a number of property firms to rethink their strategies, with many now moving towards residential property market where demand is relatively stable.
ZimRe Property Investments (ZPI) is planning to venture into affordable university students accommodation and shopping malls to cushion itself from plummeting demand for office space.
Prime commercial buildings have become white elephants due to prohibitive rentals, as tenants continue to shun highly priced offices.
ZPI, which suffered 40 percent voids in office space in 2016, has refocused its commercial property wing for residential use, with 8 000 units expected to go under renovations and sale for student accommodation.
Besides Harare-based institutions, the new strategy will also target Matabeleland University, Lupane State University and the National University of Science and Technology.

  • Takudzwa Masawi Sawex

    20 000 vendors fitting in 12000 m2 is a bit of an exxegeration Sir. The figure sounds unrealistic

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