Weak demand hits property sector
LIVINGSTONE MARUFU
Zimbabwe’s property market is battling weak demand largely due to acute shortage of foreign currency, a new Knight Frank report shows.
The weak demand comes at a time when Zimbabwe is battling severe forex currency shortages in the formal market. Many are forced to turn to the parallel market where premiums are punitive.
“Zimbabwe experienced foreign currency shortages which triggered turbulence, worsened by currency fragilities that led to low disposable incomes.
“The mortgage market was weak, and most buyers had to find cash to acquire properties. Space absorption was insignificant during this period as demand remained weak with supply continuing to outstrip uptake especially in the CBD offices,” part of Knight Frank report reads.
It said stakeholders in the property industry are expected to adopt a wait and see attitude in light of the forthcoming general elections, which are set to be held in August 2023.
The report also showed that the sub-market continued to be dominated by residential property projects and small sized commercial developments.
Suburban office market remained buoyant due to ongoing relocation activity away from the central business district.
The conversions from residential to commercial use was prominent in the main arterial routes especially in the suburbs.
There has been ongoing major development of malls such as Highland Park, Chinamano Corner, Madokero Shopping centre, Ridgeway North and Five Avenue shopping malls.
Also, fuel station developments within the city continue to be on the increase giving motorists several refueling options.
The attractiveness of the real estate sector led to the birth of first Real Estate Investment Trust, the Tigere Property Fund with a property portfolio valued at US$22m listed on the Zimbabwe Stock Exchange.
More similar listings are expected in 2023.
Also, part of the new central business district of Harare is being built by UAE company, Mulk Holdings and will feature a five-star hotel, Mulk Office tower building, a shopping mall, restaurants, medical facilities, luxury villas, recreational facilities.
Knight Frank said re-emergence of cranes in the skyline of Harare, after a hiatus of over two decades, was witnessed after the ground breaking ceremony of the US$80m Regional Afreximbank Head office was held in September 2022 with completion expected in 28 months.
The regional hub will include a five-star hotel, a conference centre and a trade and investment centre for entrepreneurs in the 35 000 square metre development.
The newly opened NMB headquarters, situated along Liberation Legacy way, in August 2022 joined other property players in embracing renewable energy and in the process addressed perennial power outages in the country, the report said.
The report said the majority of rentals will be paid in US$ currency in 2023.
