Real estate sector shows resilience
Zimbabwe’s property and real estate industry is showing signs of resilience and adaptability as it navigates through the challenges of post-pandemic recovery and rising inflation.
Terrace Africa development manager, Ms Charity Chirume, has cited a series of pocket developments, at various stages of completion, as evidence that players in the sector are being innovative.
“Some players are taking advantage of the new financial vehicles, such as Real Estate Investment Trusts (REITS) to raise capital,” she said.
Rising inflation during the first half of 2023 has seen most rentals denominated in US dollars, as property owners try to preserve value.
However, this has impacted rental growth.
“The operating environment has affected tenants’ rent-paying capacity in hard currency,” explained Mr Gibson Mapfidza, Mashonaland Holdings managing director.
“Dollarised rentals have only helped partially to hedge against hyper-inflation because, in real terms, rentals have struggled to match inflation.”
“The property market has remained resilient as it devises ways to deal with the pass-through effects of the economic challenges. We see exciting opportunities in student accommodation, tourism and health facilities,” Mr Mapfidza noted.
His upbeat outlook is shared by Ms Chirume who added that demand for strategically located, quality retail space and integrated mixed-use developments present more exciting emerging prospects.
Some changes to existing policy and updating of local and master plans are being encouraged to attract more investment into the sector.
“The local plan which designated ED Mnangagwa Road as a development corridor has spurred huge investment in the area and bears testimony to the impact that clear and coherent policies can have on the property market,” Ms Chirume explained.
“While it is evident that we may be witnessing the commencement of a construction boom as PPC reported a 42 percent volumes increment in its operating update for the five months ending August 2023, the availability and quality of infrastructure such as roads, sewer and water becomes a critical enabler for sustainable economic growth.
“There is a need for collaboration between local government and private developers for long term solutions potentially through public private partnerships (PPPs) and rebate programmes.”
Mr Mapfidza concurred adding that there is a need for modern energy, water, transport and ICT infrastructure.
“In the long-term, the property industry requires significant infrastructure investment if it is to sustain its return generation capacity into the future, and to maintain the general ambience of the cities,” he said.-chronicle
