adminPROPERTY worth more than $7 million in Bulawayo’s industrial areas and central business district is up for sale amid concerns investors could be deserting the city, increasing calls for Government to quickly move in to save companies in the country’s second capital.
A survey by Sunday Business revealed that the market is flooded with industrial property and business premises for sale and to let and industry and property experts have attributed this to the prevailing economic situation.
The industrial stands and properties are in areas that include Kelvin North, Kelvin West, Belmont and Donnington.
Some of the buildings that are up for sale include two shops on Railway Avenue going for $100 000, a warehouse/light manufacturing space in Donnington and a commercial building along Jason Moyo Street which is going for $650 000.
Other big buildings on sale are in Belmont-Luton, 15th Avenue, Thorngrove, Josiah Tongogara, Jason Moyo and Birkenhead.
Industrial stands in Kelvin North and West are also up for sale ranging from $30 000 to $120 000.
A property consultancy company official who spoke on condition of anonymity said most industrial properties were designed for manufacturing hence people were rationalising space from manufacturing to storage as that was what is on demand now.
“There is actually a significant increase in the number of industrial properties being put up for sale and the take-up rate is forever. It is a buyers’ market now as buyers are controlling the market and prices,” he said.
The official said most property owners were selling to raise working capital and there was no funding available to develop some of those properties hence selling the vacant pieces of land was better than holding on to them as there were costs to bear.
“Banks are not giving loans and there are council levies to pay hence most people who are disposing of their property are doing so in order to avoid additional costs and to raise working capital to finance the businesses that they can sustain,” said the official.
Estate Agents Council chairman Mr Oswald Nyakunika said there was a serious cash crisis and deflation and as a result there was a decrease in the amount of money in circulation and decrease in purchasing power.
“This is the reason why most of the industries have closed down; the demand for their services and products has dropped to unsustainable levels. Yes, the number of empty industrial buildings has increased as many companies have closed down.
This is why many owners are on the market to lease or sell those properties and because there are many on the market, prices or values have dropped,” said Mr Nyakunika.
Mr Nyakunika said the property sector was characterised by high rental default rates and high voids.
“As a result this has negatively affected rental levels and property values. However, property as an investment has fared well in comparison to other investment vehicles such as money and equity markets,” he said.
He, however, said Bulawayo industry still had a future as the location was good and that the growth of Bulawayo industry was largely due to its good location in relation to neighbouring markets.
“That advantage still remains but what is required is recapitalisation and competitive advantage with regards to the prices of the services and products offered. I believe Bulawayo industry still has a future,” he said.
Zimbabwe National Chamber of Commerce Matabeleland Chapter official Mr Crispen Mugova said most businesses were selling their properties because of viability issues and the fact that most of these properties were now just shells.
He said they had noticed with concern as captains of industry that churches had occupied production properties mainly in Belmont and Kelvin.
“Property owners are being forced to dispose of company assets to raise capital because of litigation by banks. Financial institutions are recalling loans given to businesses and to pay those debts companies are forced to sell industrial stands and other property,” said Mr Mugova.
Mr Mugova said some companies were in possession of a number of properties hence when they downsized, they had to sell to recapitalise those downsized businesses.
“Buyers are mostly not buying to run manufacturing businesses but for other purposes like churches because they have disposable income,” he said.
He, however, said this phase (deindustrialisation) would pass, the economy would pick and those with funds were already speculating on this change and buying industrial space.
Online Reporter