Time for property portfolio reconfiguration
There is urgent need for property portfolio optimisation and keeping abreast with the changing dynamics in the sector in order to remain sustainable during uncertainties, experts say.
This comes as the outbreak of the Covid-19 pandemic which was first detected in China in December 2019 has changed the business landscape.
Properties, for instance, office space has been hardest hit by the pandemic which has seen businesses adopting virtual offices as opposed to the usual physical buildings.
As a result, voids were high with occupancy below 60 percent in 2020.
As a result Integrated Properties chief executive officer Dr Mike Juru said repurposing of office buildings was a must.
“There has been voluntary space surrenders in commercial office space and this segment has been the most affected. Some people have realised they can actually work from home, so what will be the point of having offices.
“This means as stakeholders we need to see what works and what doesn’t. There is need for portfolio optimisation and restructuring,” said Dr Juru during a 2020 Property Market Report webinar.
The office space especially in the Central Business District has been affected by tenants moving to office parks or suburban offices, leaving voids.
Some property firms have already started looking at re configuration of their properties in line with the changes on the market.
For instance, firms like Zimre Property Investments have converted Nicoz House into student accommodation facility in Bulawayo while Mashonaland Holdings is converting its Charter House in Harare into an upmarket hotel.
During the year, the retail space was affected by the Covid-19 induced lockdowns that impacted on sales and capacity to meet rental obligations.
“Not all retail shops were opened but only the essential services which has an effect on tenants,” said Dr Juru.
Despite the challenges posed by Covid-19 pandemic on global economies and at national level, Dr Juru said the real estate sector remains one of the most resilient with investor appetite always.
The real estate sector is a good hedge against inflationary pressures.
Said Dr Juru: “The variation comes on which particular subsector. In uncertain times, the physical nature of property assures investors.”-herald.cl.zw
