THE industrial property market which recently took a plunge has now gained momentum since the introduction of the Reserve Bank of Zimbabwe (RBZ’s) 30% productive sector finance facility.
President of the Real Estate Industry of Zimbabwe (REIZ) Abraham Sadomba this week said more manufacturing companies were now entering the industrial property sector.
“Actually over the past two months there has been a huge demand for industrial properties,” he said. “Activity on the market has been up since the introduction of the RBZ’s 30% productive sector facility.”
Property market analysts said manufacturing firms were buying industrial stands and properties.
“They now want to own their properties,” Sadomba said. “The 30% facility is helping them do so.”
In terms of the monetary policy statement announced by the RBZ governor Gideon Gono on December 18 concessionary finance was made to productive and export sectors including the property sector at a maximum all-inclusive interest rate of 30%.
Under this facility, statutory reserves contributed by financial institutions were made available to commercial and merchant banks for onlending on a revolving basis.
Construction companies and building contractors registered with the Construction Industry Federation of Zimbabwe (Cifoz) were eligible to utilise the facility.
Specific sectors included blasting and excavating contractors, civil engineers, drilling contractors, earth moving engineering, construction engineers, hydraulic engineers as well as road contractors among others.
On the technical side professionals such as architects and surveyors, electrical, electronic, mechanical, air refrigerating and air conditioning engineers also qualified for the finance.
However, all those engaged in real estate business as dealers, developers, operators and agents were not included in the 30% facility.
The RBZ says so far $1,3 trillion has been pledged for the 30% productive sector finance facility.
“This has helped the industrial property sector,” Sadomba said. “Companies especially in the manufacturing sector are buying properties.”
On the residential property side however the situation is very different as the market is rather “quiet”.
Landlords are still holding on to their properties hoping that prices will pick up soon.
Last week the RBZ warned landlords charging tenants or potential buyers in foreign currency that they now face the wrath of the law if they continue to do so.
The Consumer Council of Zimbabwe supported the move, saying no goods and services in Zimbabwe should be charged or pegged using foreign currency as had become the norm.
Landlords owning designer properties in the upmarket suburbs were laughing all the way to the bank as they were renting out their mansions in United States dollars in broad daylight.
In Zimbabwe it is illegal to charge for goods using foreign currency.
It was however permissible to peg items in foreign currency in which case the Zimbabwe dollar equivalent was payable.
Former RBZ governor Leonard Tsumba had allowed estate agents to peg their properties in foreign currency but they had to actually charge in Zimbabwe dollars.
New governor Gono has however put paid to all this.
He last week issued a stern statement stopping individuals from pegging or charging for their properties or any other goods in foreign currency.