Real estate sector to remain lucrative

Experts in real estate say the sector still remains one of the most lucrative investment options in Zimbabwe offering real returns, despite the obtaining economic headwinds.

Since time immemorial, real estate has always been a safe haven for investment during uncertain periods and a perfect hedge against inflationary pressures for instance.

Stakeholders who attended the ZimReal Property Investment Forum held in Harare yesterday agreed the real estate still offers great opportunities and “peace of mind” for both individual and corporate investors.

The retail, hospitality, student accommodation and office parks segments are among the top picks while the central business district (CBD) has been rated the least attractive segment currently, evidenced by growing voids of recent.

“Investment in the real estate remains viable,” said Robert Mutakwa, general manager ZB Bank Transfer Secretaries.

“We are seeing a trend where land bank acquisitions and developments are being pursued vigorously,” he said.

Market trends show there is growing shift from the central CBD towards office parks and suburban offices as businesses leave the CBD space due to various reasons among them to dodge pollution, poor and dilapidated infrastructure which can no longer cope with the growing population as well as high traffic congestion.

Partner at Knight Frank Southern Region, Sithembinkosi Mbavhumana said the retail segment presented lucrative opportunities with high demand from the market. He said demand for retail space in Bulawayo for instance was high, with some industrial spaces already being converted for retail.

The non-availability of formal employment due to Covid 19 challenges, for instance has seen most people want to start a retail business selling various commodities and landlords have capitalised on this trend.

“Those who want to invest should move into retail. Demand is especially high for smaller units to cater for the growing SMEs.

“Those with large spaces can re-partition to cater for SME retail businesses. There is high revenue potential in this segment,” he said.

As the economy struggled with the adverse impacts of the Covid 19 pandemic with limited formal employment, many Zimbabweans turned to informality, starting their own enterprises. Retail business tops the list of the new enterprises, thus driving demand for space in both the CBD and residential areas.

Mashonaland Holdings head property management Progress Kamonere said while the retail offered good return on investment, the warehousing segment has remained underserved and is also emerging as a giant in the sector.

She said: “The industrial sector has been very resilient. We need to store the goods and products from industry which creates scope for more investment into this segment,” she said.

Industrial activity has been on the increase following relaxation of Covid 19 restrictions while agriculture and mining have also helped push demand for space.

According to The Africa Report by Knight Frank, warehousing space has remained in short supply in the country.

“In the industrial sector, demand remains strong but is largely unfulfilled due to limited supply. There have been no significant warehouse completions recently and most new developments are owner-occupied.

“The positivity in the sector is to an extent continuing to be tempered by power outages, low capitalisation, poor water supply and deteriorating infrastructure,” said Knight Frank.-ebusinessweekly