Clive Mphambela/Hebert Moyo
THE National Social Security Authority, (Nssa) has emerged as the country’s leading property investor since 2009 after dollarisation ushered in an era of stability.
In an exclusive interview with the Independent, Nssa general manager James Matiza said the authority had developed a comprehensive 10-year investment plan targeted at securing quality investment properties. According to Matiza, the plan was consistent with prevailing developments in the economy since 2009 and would be continually reviewed to align with Nssa’s long-term goals.
Matiza said Nssa had resumed work on the construction of the 140-room Beitbridge Hotel at an estimated completion cost of US$25 million. The project should be completed by end of September 2012.
Nssa is also working on the US$7 million Masvingo Runyararo Housing Development plan which would see the development of 663 housing stands once necessary preparatory works required for servicing to start are completed by the local authority. Nssa has targeted June 2013 for completion of the project.
According to Matiza, there have been significant challenges. Prior to dollarisation in 2009, hyperinflation which skyrocketed to above 31 million per cent in July 2008 rendered the Zimbabwe dollar worthless. As a result, at the peak of the economic recession in 2008, Nssa was forced to suspend projects like Glaudina Eastate, Marondera (Rusike) Housing Project, and the Bindura Commercial Centre. Nssa also suspended refurbishment of its Nssa House, Bulawayo and Beitbridge Hotel.
The introduction of dollarisation after February 2009 and the establishment of the unity government brought quick macro-economic stabilisation and turnaround of the economy through the containment of inflation and promotion of market forces in the distribution of resources in the economy, including in the property sector.
The stable environment for planning set the stage for Nssa to resume suspendend projects.
On Nssa’s list of new developments is a shopping mall scheduled for the Chipinge town, which should commence in September 2012 and be completed by end of 2013.
Nssa also acquired the Ximex Mall but redevelopment- which will see the demolition of the existing rundown building to make way for a new multi-storey facility, within a budget estimate of US$ 16 million, was scheduled to commence in July 2012, but has set aside pending the exit of the current sitting tenants in the building. This is scheduled to be a 24 month project.
Glaudina Housing Project Phase 1 comprising 394 medium density stands, 73 high density stands, 8 commercial stands and various institutional stands is to be completed by 31 August 2012, whilst the servicing of Phase 2 comprising 1 600 stands at a cost of US$9 million is due to commence later this year after all the approvals.
Matiza said Nssa’s Portfolio strategy on property is guided by economic trends in the supply and demand of investments property.
“Under the current economic environment there is no need for additional supply of industrial buildings because there is no demand, as most existing industrial buildings are under-utilised. Similarly, there is no demand for office space, as a result the Authority has got to concentrate on commercial retail which is in demand,” Matiza said.
Matiza noted however, that since dollarisation it had become generally more expensive to build than to purchase existing buildings. As a result Nssa has found it prudent to purchase more existing properties instead of constructing.
Recently Nssa acquired Ballantyne Park Properties, the former StarAfrica Headquaters along Borrowdale Road, Pomona Shopping Centre in Harare.
Nssa also bought Zimnat House and the Eye Clinic in Bulawayo for US$790,000 and US$2,25 million respectively.
Matiza said Nssa was developing housing for disposal purposes.
“Priority in housing is mainly for low income group. For this reason high density housing developments are planned across the country with Marondera having already benefitted after the development of Rusike Housing Project,” he said.
Nssa’s Glaudina Housing Project is in progress with Phase1 which is mainly medium density expected to be completed by August 31, 2012 whilst Phase 2 of the project comprising 1600 high density stands is due to commence this year as soon as the necessary approvals. The Masvingo Housing Project is due to start after being set back by off-site infrastructure which is a responsibility of the Municipality of Masvingo.
However, in order to enable this project to proceed Nssa Board approved a loan of US$2.1million to meet the cost of offsite infrastructure. Once the implementation of offsite infrastructure has commenced, Nssa is ready to move to Masvingo to start developing 663 high density stands.
Next year Nssa will move to Bulawayo to develop high density housing stands. If the land becomes available, Nssa plans to continue to develop housing countrywide.
The major challenge facing Nssa is the availability of offsite infrastructure. Most local authorities do not have adequate offsite infrastructure to enable development of housing.
Nssa property portfolio yield averages 8,25%, slightly below industry averages of 9% whilst Nssa vacancy rates is only 5%. Property companies in Zimbabwe have vacancy rates of between 10 and 15%.