Property & Infrastructure

Demand for office space dwindles

LIVINGSTONE MARUFU

Demand for office space in Harare’s central business district and leafy suburbs has gone down due to subdued operations, making it difficult for companies to run smoothly, a new report has shown.

The report said many firms are now converting homes into offices as they fight to survive the devastating impact of Covid-19 pandemic.

“As more people adapt to working remotely this will also see reconfigurations within homes to allow for workspaces. While this enhances values for properties due to conversion into business space and the downside of it is that it leads to the demand in office space,” reads part of the new report by properties firm, Integrated Properties.

The report also said once this phenomenon has become entrenched in people’s lifestyles, there may be no going back to the old operations.

There will be a push for multi-purpose buildings, the report said.

“In the short run, particularly in the city centres, office rentals and occupancy will continue to decline and a push for multipurpose buildings and relaxed town planning regulations may be unavoidable as owners of city centre buildings seek to convert their properties to residential use…,” the report said.

Technological innovations mitigating the traditional direct physical contact will replace human interventions in the sector which will see the reduction of manpower in property services, the report said.

The effect of the Covid-19 will see many people losing their jobs due to minimum people needed in the office at a given time.

According to the survey report, firms are slowly leaving leafy suburbs for other residential areas where there is traffic as they move to push volumes.

The report said companies were struggling to keep up with expensive rentals and the cost of maintaining the building especially during the Covid-19 pandemic hence a great exodus is expected in the coming months.

“Demand for fancy, expensive locations is going down as people will be able to work from anywhere, not confined to specific upmarket locations, making expensive locations and occupations unnecessary,” the property market report said.

Occupant levels remained low in rental markets with empty spaces being a perennial migraine for property owners in both the residential and commercial space.

The property market report said, “There was migration of tenants from leafy suburbs to landing suburbs as they adjusted to making the final move to lower ranking suburbs as the pandemic dealt a blow on disposable incomes.”

The situation has seen landlords losing their bargaining power as tenants negotiated rental downwards thereby lowering returns on properties. This has significantly impacted on property values.

Listed entities in the property and construction sector said trade was subdued for the most part of 2020 and the same is expected this year.

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