Property market defies economic turbulence
... as Masholds moves to unlock legacy value
SAMANTHA MADE
Zimbabwe’s property market is proving to be a rare bright spot in an economy grappling with inflation, high interest rates, and weak consumer demand.
Despite these challenges, the sector continues to demonstrate remarkable resilience—capturing investor interest and delivering relatively stable returns. Mashonaland Holdings Limited (Masholfs) is positioning itself to capitalize on this trend, announcing a strategy to commercialize its prior-period investments and safeguard shareholder value.
“Despite the challenging economic climate and limited availability of affordable capital, the local property market has demonstrated resilience and continues to capture the interest of investors. This sustained interest can be attributed to the relatively stable and predictable returns offered by real estate investments,” said Egnes Madhaka, the company’s secretary.
Tbe company has outlined a strategic shift aimed at unlocking value from legacy investments while recalibrating its portfolio to strengthen returns.
The company’s updated focus was detailed by secretary Madhaka in its first-quarter trading statement.
“Looking ahead, the Group is focused on commercializing its prior-period investments while continuing efforts to achieve a balanced portfolio structure that safeguards investor returns,” she said.
The announcement comes amid a challenging economic environment characterized by subdued demand, inflationary pressures, and high borrowing costs. According to Madhaka, the slowdown in economic activity has been driven by erosion in consumer purchasing power and tight monetary policies aimed at stabilizing the exchange rate.
“The first quarter of the year was characterized by weak consumer demand across economic sectors. This slowdown in economic activity is attributable to the erosion in consumer purchasing power, a consequence of inflation and high interest rates. These conditions are reflective of the prevailing tight monetary policy stance implemented by the authorities,” she noted.
The Reserve Bank of Zimbabwe (RBZ) reported a USD year-on-year inflation rate of 15% by the close of the quarter, maintaining a high cost of borrowing and constraining access to affordable capital. Yet, real estate has remained resilient, supported by stable income returns and enduring demand for quality commercial and residential space.
“The local property market has demonstrated resilience and continues to capture the interest of investors,” Madhaka reiterated. “This sustained interest can be attributed to the relatively stable and predictable returns offered by real estate investments, as well as the persistent underlying demand for prime commercial and residential space.”
She further observed that different segments of the property market are showing varied growth patterns, with retail and residential developments emerging as key areas of activity. This shift is being driven largely by the growth of the informal sector and Zimbabwe’s chronic housing shortage.
“The property sector continues to witness differing growth patterns. The occupier market continues to be dominated by strong demand in the residential and retail market segments. Demand for retail is spurred by the growing informal sector in the economy. Property owners have responded to this by converting some CBD spaces into miniaturized shopping units to appeal to the informal sector,” Madhaka explained.
She also noted that housing demand remains strong due to the national backlog and the limited rollout of new developments in recent years.
“Demand for residential accommodation is spurred by the housing backlog and a limited supply of new housing stock over the years. Property developers have responded to the shift in the occupier market with more investors now attracted towards retail and residential development projects which offer return on investment in the short to medium term,” she said.
Masholds strategy to monetize legacy assets and adapt to shifting market dynamics reflects a broader confidence in real estate as a buffer against macroeconomic volatility. The Group’s focus on unlocking value while reinforcing its portfolio balance signals a long-term approach aimed at sustaining investor confidence in an uncertain economic landscape.
