High void rates hit CBD properties

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Gamuchirai Tsokota

Listed property entity Mashonaland Holdings (Mash Holdings) says government should partner local investors in mordenising Harare as the capital continues to lag behind its regional peers.

Limited activity in the construction industry due to an under-performing economy has resulted in the absence of cranes on Harare’s skyline.

Zimbabwe is suffering from economic and liquidity challenges which have stagnated office market activity. Supply is higher than demand and tenants are voluntarily surrendering space. Market players say office buildings in the Harare CBD have void rates in excess of 50%, making them unattractive investments. Suburban offices have become more sought-after investments, due to their lower void rates, but there continues to be few sales transactions. To reduce vacancy levels, some CBD landlords are converting office space to shops, while others are partitioning floors into smaller suites. Given the challenging market, no new multistorey buildings have been constructed in the last twenty years.

Mash Holdings managing director Gibson Mapfidza said huge in investments in the capital could help ease congestion in the capital as city fathers plan to transform it into a modern city by 2030.

 “Congestion is one of the  symptoms of urban problems thus talking to traffic then the other one is pollution in its various forms and the vendor menace those are the three key symptoms that you see coming out of urbanization,” said Mapfidza.

 “We have seen urbanisation happening at a faster rate compared to urban growth where urban growth is the real growth of the economy. For the past fifteen years the economy has been very slow so we have more urbanisation but urban growth is not happening” he said.

According to the world population review the city of Harare accommodates over 1,5million thus excluding surrounding towns such as Chitungwiza which has over three hundred thousand yet little development has been done in the capital to sustain these numbers.

Experts rural to urban migration in search of employment prospects as one of the reasons why Harare’s population has ballooned since Independence in 1980.

“To address the real causes of the urban problems we are facing in Harare there is need for all the key stake holders including ourselves as Mashonaland Holdings to focus on growing the urban economy and by so doing we provide for those people moving into the urban city and also at a very bigger scale we think the government has got a responsibility to develop other cities or the rural areas to deal with that rural to urban migration” said Mapfidza.

He said property developers should also consider investing outside the central business district to ease congestion in the city.

“In terms of out-migration of business from the CBD , at a broader scale it is because CBDs gained prominence in the 1950s  where we didn’t have ICTs so there was economics in agglomeration of coming together but now because of ICTs and cheap communication and transport costs there is no advantage of being closer together,”  he said.

 “Looking at our portfolio we have looked at our buildings in terms of their relative location and their designs and we are fairly happy with all of them except the Charter House. We have taken a deliberative move to change Charter house which is 61 years old now. We believe it has gone past its economic effective life and what we need to do is to rehabilitate it. The thrust now is to change use to a multipurpose mixed use with the primary being the hotel” said Mapfidza adding that the company is working on a budget for the face-lift.