Zimbabwe property sector struggling

Published: 12 March 2014

Zimbabwe property owners have decided to convert office space in cities to retail outlets in a bid to stay afloat, according to Africa Report.

The report says that the property owners have been realising low returns from their investment and firms renting office space are defaulting on rentals.

"We have noticed that the private investors have been redesigning their spaces particularly in the CBD from office to retail. Default rates are now as high as 50 to 60 percent compared to the normal rates of between 10 and 20 percent," said Africa Report.

The crisis has been attributed to the liquidity challenges in the country which have in turn led to the deterioration in the quality of tenants. Most of the tenants have even failed to honour payment plans leading to them absconding or being evicted.

Africa Report quotes property analyst Mennard Chekayi as saying there had been a shift in the property sector where many offices in the central business districts were being redesigned to suit retail operations.

"We have realised that at the moment since we moved from 2009, many companies are closing down and people are losing their jobs here and there, but the Zimbabwean person becomes a trader, one would rather buy and sell things and the need for retail space has increased," Chekayi said.

"We have noticed that the private investors have been redesigning their spaces particularly in the CBD from office to retail and that demand has driven retail to perform very well."

Chekayi said as of December last year there has been an additional 20 000 square metres of retail suburban space and 5 000sqm in central Harare while office developments were about 30 000sqm of new office park space.
- bh24

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