daniel chigunwe
Business Writer
Listed property companies say the property market sector is experiencing varying growth and performance patterns due to volatile market conditions.
They contend that the real estate sector remains impacted by liquidity constraints in the formal sectors of the economy, thereby limiting large-scale developmental activity.
“Reduced liquidity has also led to an increase in the cost of capital, with financiers unable to provide long-term funding to support development projects.
“As a result, real estate investors in the country have tended to prioritise high-yielding short-term investment projects while other market segments have experienced a slowdown in investments,” Mashonaland Holdings said in its recent financials.
The company said the occupier segment continues to witness changing tenant preferences with corporate tenants relocating from central urban to suburban offices.
At the same time, it says the market has also experienced growing demand for mixed-use developments as well as grade A warehouses, which provide retailers and wholesalers direct access to their markets.
However, despite that, the country’s real estate market continues to offer capital preservation opportunities and moderate to high returns for investors targeting affordable housing developments, mixed-use projects and infrastructure investments that support economic growth and urban development.
In that regard, Mashonaland Holdings has development projects at different stages of implementation.
These include the Pomona Commercial Centre, which is comprised of a wholesaling unit and flexible warehousing constituting 14,000 sqm of lettable space.
The company said the project commenced in July 2023 and has now achieved a 90 percent stage of completion.
“The project is on course to be delivered in November 2024. At least 65 percent of the development has been pre-leased,” the company said.
On the Greendale cluster housing stands, the company said it has applied for regulatory approvals to enable presales on the planned development project.
“A development permit has been secured for the project, and an Environmental Impact Assessment is currently being carried out. Pre-sales on the project are planned to commence towards the end of the year once all regulatory approvals have been secured,” the company said.
First Mutual Properties said the market continued to develop residential stands, cluster houses and high-rise flats for investment and sale purposes.
It said focus has been on developing owner-occupied office park-style buildings and converting suburban residential properties into offices along the major arterial routes, adding that the development of industrial and warehousing properties has also been more pronounced.
“It is, however, noteworthy that investment in supporting infrastructure, including roads, power, information communications technology, water, and sanitation, is required to sustain property market developments,” FMP said.
It said the group is exploring opportunities in strategic areas to sustain its growth strategy. FMP also highlighted that property maintenance and modernisation will be prioritised.
“Further, the group will strive to grow the occupancy levels, effectively manage working capital, and create sustainable stakeholder value,” it said.
Securities firm IH Securities, in a recent report, said Zimbabwe’s property market remains affected by slow space uptake, particularly impacting office space in the central business districts (CBDs) due to low economic activity in the formal sectors of the economy.
“Most property owners are engaging tenants with a view to converting Zimbabwean-dominated leases to United States dollars to enable value preservation.
“Also, due to continued disparities between official and alternative exchange rates, suppliers practice forward pricing, leading to significant cost pressures for businesses,” reads part of the report.
Bongani Ndlovu