adminNgoni Dapira Busieness Correspondent
There are now several empty shops in the Central Business District in Mutare along Herbert Chitepo Street, while most office spaces in the many-storey buildings have been deserted, a snap survey by Post Business has revealed.
Affirmative Action Group Manicaland chapter has voiced concern over high priced rentals in the Central Business District and is calling for regulation.
Despite the general low business activity owing to the liquidity crunch in the country, most leaseholders have cited high charges estimated between US$8-14 per square metre as the major problem.
AAG Manicaland chairman Mr Fungai Chaeruka said there was need for Government to intervene and engage property holders.
“Rentals are too high. There is need for Government to now step in and negotiate with major property holders for rational pricing. More and more shops are going empty by the day in the CBD in Mutare. If the situation is not looked into we will end up having a ghost town with empty shops simply because the commercial property owners are not budging.
“Market forces should guide them to reduce commercial rentals but most property owners currently prefer to have empty offices than slightly reduce rental prices to assist ailing businesses,” said Mr Chaeruka.
He said the office space high rentals were derailing the formalisation drive of Small to Medium Enterprises under the economic turnaround blueprint Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
Some property owners, he added, were also now intentionally pushing tenants out through unrealistic rentals to take over the goodwill of the companies after removing them.
“If ZimAsset is to work, there should be serious engagement by Government especially with parastatals that are property holders like TelOne, National Social Security Authority to mention a few,” said Mr Chaeruka.
An official from the commercial rent board who requested anonymity said their board was a constitutional body authorised to administer all industrial and commercial rental matters.
He, however, said they did not have the power to regulate or dictate rental prices because in Zimbabwe the market-forces system is used to standardise rental prices.
“What we keep an eye on is the unfair hiking of rentals. Tenants can apply for fair rent termination when landlords increase rentals without proper justification. In such cases we can intervene.
“We, however cannot force landlords to reduce rentals when tenants fail to pay the contracted charge signed to in the lease as in the current case.
“We also assist with unlawful evictions of tenants when there is breach of lease agreements by the landlord,” said the source.
He also advised tenants to always be cautious when they signed lease agreements, adding that tenants should avoid signing agreements that stipulated that ‘‘in the event of a dispute, resolutions should be resolved by an arbitrator’’.
He said the commercial rent board would not be able to assist in the event of a fall-out under such a lease agreement.
Last year in March Post Business revealed that there was high pricing of properties leased by some quasi-Government institutions in Mutare.
The properties of parastatals leased by NSSA and TelOne were indicated to be among the most expensive in the city, despite the fact that they were constructed from public funds.
Lessee’s in the CBD offices at the TelOne Building like Heritage Insurance and Landmail Liaison Auctioneers (Pvt) Ltd opted to move out citing high rentals estimated to be between US$11 and $14 per square metre.
The proprietor of the latest state-of-the-art building in the Mutare, Twin Towers, Mr Oliver Mapunga, said his property was in the CBD, but he charged reasonable rentals averaging from $7 to $10 per square metre.
One of the largest property investment managers in the country, First Mutual, which owns First Mutual Centre in the CBD, charges between $7-$10 per square metre for their offices while Old Mutual, at its Dangamvura Shopping Complex, charge between $2 and $4 per square metre.
Zimre’s Fidelity Centre, another privately owned building, charges between $7-10 per square metre.
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