eBusiness Weekly
Business Writer
The uptake of lettable space has slowed down and the rentals have been flat since the last quarter of 2017, Dawn Property Consultancy has said. Responding to Business Weekly, Dawn Property Consultancy, General Manager, Valuation and Advisory Services, Kudakwashe Chadambuka said rentals for office, retail and industrial properties are depressed as they were below the regional averages.
“The regional office rentals are between $10/m2 — $15/m2 whilst the country’s office space rentals for CBD offices are between $4/m2 — $8/m2 per month.”
“In the same vein, industrial rentals are low ranging between $1,5/m2 – $3m2 per month,” said Chadambuka.
“This is mainly attributable to low industry space utilisation and most industries have become white elephants with majority of those occupied being either owner occupied or mainly used as warehouses rather than being the “core of production”.
Chadambuka said trading densities for retail sector remained stagnant across the board in 2017 and in this first quarter of 2018.
“Retailers have been facing challenges of competition from street vendors who are selling the same (or similar products) at lower prizes than that charged in formal stores.
“The price hike of September 2017 has further threatened the viability of the retail sector as more informal market invaded the country’s CBD corridors increasing the inaccessibility of formal market.”
Chadambuka said residential property developments have been the most dominant, particularly the high to medium schemes.
“However, it can be noted that there is inadequate supply of land to cater for residential market as evidenced by ballooning list of people on the waiting list of local authorities.”
“This has led to a slightly increases in the prices of residential stands with high density stands commanding up to $70/m2,” she said.
She said following the September 2017 commodity price hikes, the property sector was also not spurred as the construction cost went up by approximately 15 percent.
“This was chiefly driven by the cost of finishes – most of them are imports bound — to the construction basket.”
Chadambuka, however, said the property value drivers such as rentals and yields remain the same during the last quarter of 2017 and in early 2018.
“Although the market responded positively to new political developments in the short term, prices are still on an upward trend and commercial properties value drivers remain stagnant,” Chadambuka said.
She noted that the new government has brought in a raft of fiscal changes which are expected to reduce public sector spending and create space for capital expenditure.
“The mere fact that foreign investors are making inroads to the Zimbabwean market is a clear testimony that the future of real estate is so bright and promising.”
“A multifaceted economic outlook has emerged in Zimbabwe at a time when the global political environment appears increasingly fractured. Real estate remains the most favourable investment asset class because of its ability to retain and increase the value of capital invested in the medium to long term. It can be asserted that to sagacious investors, this is the time to invest in real estate asset segments.”
