…Scramble for shelter in Borrowdale
The leafy Borrowdale suburb has become a magnet for Zimbabwe’s top corporates that have found a home in the affluent area as they desert the high volume of traffic and parking space constraints in Harare’s central business district (CBD).
The scramble for offices in Borrowdale is gradually transforming the suburb into a commercial hub, despite the coming in of Mt Hampden, which is expected to be the new capital city for Zimbabwe in the near future.
Already, a new Parliament building constructed by Chinese contractor, Shanghai Construction Group in Mt Hampden, about 25km west of the capital Harare. In the past, Zimbabwe’s corporate heavyweights favoured to be headquartered in Harare’s CBD.
But, this does not seem to be the case anymore. The few that have remained in the heart of Harare’s CBD are those whose day-to-day business activity is associated with high numbers of traffic or customers.
Borrowdale has lured notable big corporates such as Zimbabwe’s biggest platinum miner, Zimplats, listed smartech group Cassava Smartech, leading medical aid society CIMAS, Great Dyke Investments and resources firm, Bravura Consortium.
One of Zimbabwe’s largest financial services providers, CBZ Holdings, and Meikles Limited have also migrated from Harare’s CBD to house their headquarters in Borrowdale. Zimbabwe’s capital markets regulator, the Securities and Exchange Commission of Zimbabwe has also found a home at the cash-rich National Social Security Authority’s Celestial Park in Borrowdale.
The now popular area for corporates has also lured diversified financial services group, Zimre Holdings, which has found shelter in Borrowdale just adjacent to Celestial Park.
The latest to migrate to Borrowdale is financial services provider, NMB Holdings, which recently moved into its multi-million-dollar head office along Borrowdale road.
The country’s biggest brewer, Delta Corporation, CABS and First Mutual Holdings were some of the pioneers in the Borrowdale area. Analysts say the exodus from the CBD is necessitated by the high volume of traffic driving into town and limited parking space which forces many office workers to seek parking outside of their building of employment at an additional cost.
Costs for parking in the CBD is pegged at ZWL$50 per hour which many have described as exorbitant.
Power outages and water supply issues are other significant challenges in high rise offices where it is impractical to run a generator for a 20-storey building for example.
“High traffic volumes and one way streets that are not user friendly have made driving into Harare’s CBD a daily frustration for many,” property expert Kura Chihota told Business Times, adding: “This has caused a growing trend of companies looking to move out of Harare.
For clients, a visit to CBD offices sees one facing ZWL$50/ hour parking charges and the prospect of having your car clamped are very high. Power outages and water supply issues are also other significant challenges in the CBD.”
Several other property experts who spoke to Business Times said the influx of big corporates in the Borrowdale area is likely to result in the suburb matching the standards of Sandton City, a commercial hub in Johannesburg, South Africa.
“Faced with various challenges in the CBD, most companies have started moving to office parks and further developments are also happening in areas like Milton Park, Belgravia and Avondale and most importantly in Borrowdale,” Francis Chinjekure, a real estate expert and researcher at Real Estate of Zimbabwe told Business Times.
The exodus has left property owners in Harare’s CBD feeling the pinch as they battle unprecedented increase in vacant commercial properties.
This has resulted in property owners’ incomes dwindling significantly. Consequently, the pressure on rentals and occupancy levels has forced many property owners to reduce rentals.
Market analysts say most property firms in Zimbabwe including Zimre Property Investments and Old Mutual, among others, have been hit by the latest exodus from the CBD and have since changed their investment strategy.
Their focus is now on shopping malls in suburbia which have now become the most soughtafter investments for corporates.
A report by Integrated Properties warned that Harare’s CBD could soon turn into a ghost town amid fears that the void rate could rise above the current 60% in the coming months due to lockdown restrictions which caused businesses to close for several months to combat the spread of Covid-19.
According to the first quarter 2020 report, tenants continued scaling down operations reducing space occupied in a bid to manage business costs.
“The Zimbabwe office sector continues to underperform compared to all other sectors. The sector is characterised by high void rates over 60% for office CBD and low rental yields,” reads the report in part.