adminEnacy Mapakame Business Reporter
PROPERTY concern, Zimre Property Investments Limited (ZPI) will negotiate its rental structures to accommodate the growing small to medium enterprise (SME) sector as voids continue to increase across sectors in the central business districts.
ZPI managing director Mr Edson Muvingi said the group was willing to accommodate the formalised SMEs into its current structures.
According to the World Economic Forum, SMEs provide an estimated 80 percent of employment in Africa although they still face financial challenges. In Zimbabwe, SMEs (both formal and informal) also employ an estimated 80 percent of the employable population.
Mr Muvingi said the group would need to develop specific projects aimed at housing the informal SMEs, as sub dividing current structures would be costly as it does not fit in the company’s business model.
This, he said, would destroy value.
“We are accommodating the formal ones, we are even prepared to reduce rentals for them, as long as we do not dislocate the current structures we have,” he said in an interview.
“There are categories of SMEs, there are those that are formalised but small, and those that are really informal. We will however not be able to consider the informal businesses in structures we have right now unless we make custom-made buildings specifically for them,” said Mr Muvingi.
ZPI recently reported that voids increased to 24 percent for the five months to May 2016, an increase of 12 percentage points from 2013 due to the challenging economic environment.
The sector has suffered subdued real estate demand and declines in rental revenue on tight liquidity challenges affecting the economy.
Peers, Pearl properties reported rental income fell 6,7 percent for the four months to April 2016, on declining occupancies.
The company said occupancies fell 6,14 percent as tenants seek value, reflective of the challenging economic environment.
Elsewhere, Mashonaland Holdings Limited reported revenue for the six months to March 2016 fell 5 percent to $2,8 million from $3 million in the prior year period on increasing void levels and downward rental reviews in the portfolio.
Online Reporter