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Harare Bureau
THE country’s property sector is not likely to experience significant growth in 2014 as default rates and the amount of voids continue to rise unabated. Default rates have remained as high as 50 to 60 percent compared to the normal rates of between 10 and 20 percent and this has been attributed to the liquidity challenges in the country which has in turn led to the deterioration in the quality of tenants.
Meanwhile, Government has projected a 5 percent growth in real estate by 2018 in the new economic blueprint Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
Considering the liquidity constraints prevailing in the Zimbabwe, the projection could be unattainable as estate agencies complain that individuals and companies are failing to pay rentals or buy properties as they cannot afford it.
In an interview, Estate Agency Council of Zimbabwe chairman Mr Oswald Nyakunika said the main reason 2014 was looking gloomy for the sector was because there were no investors. “There is need to boost investor confidence so that companies can start to function properly. At the moment, companies are closing down and the number of empty buildings is high. I am not talking about retail space but industrial space which has been lying idle,” he said.
He said arrears have also remained high as the liquidity crunch is talking its toll on tenants.
This year, there was a lot of activity at the public auctions as instructions from the Sheriff of Court to attach property increased with banks trying to recover debts.
Engineering concern Gulliver in May had its property in Aspindale attached to clear a debt of $1,8 million owed to ZB bank and pharmaceutical company Caps Holdings’ property also went under the hammer after it failed to clear a debt with CBZ.
“If investor confidence returns, companies will start functioning normally and take up vacant buildings then we will also start to see some changes in the sector but at the moment things are looking gloomy,” Mr Nyakunika added.
derick.khumalo