THERE are growing clamours by leading real estate firms to rethink property uses in Harare’s Central Business District (CBD), to match market trends and cushion the sector from growing voids.
This comes as commercial properties in Harare’s CBD have been recording increases in void levels as companies move to suburban areas. This has also been exacerbated by the pandemic, which has resulted in a surge in telecommuting.
One of the options analysts have suggested is the conversion of commercial properties into residential.
ZPI, a property giant which delisted from the Zimbabwe Stock Exchange in 2020; in its most recent financial report indicated the need to “repurpose” its Harare CBD buildings. ZPI Property Manager Tawanda Manyadza is also on record saying:
“Most of the CBD buildings have fulfilled their lifespan and they now need some kind of rejuvenation. The target area is the First Street block where we have three buildings. What we want is to put up a ‘mixed-use precinct’ where we will put in place a budget hotel, residential apartments, and ‘mixed-use offices.’ We are also looking at the Fidelity Life Towers where we want to create a student hub…which will offer student accommodation and learning facilities.”
In an exclusive interview with Equity Axis, the MD for First Mutual Properties, a leading Real Estate player in Zimbabwe, Christopher Manyowa elucidated the need for property usage reconsideration in Harare CBD.
“There is a need for strategy in the private property sector, especially the major owners of property within the CBD, (we) now need to collaborate with the local authorities, and the element of alternative use of properties is now compelling. I can confirm that FMP is a part of an organisation formed two-three years ago called the Property Owners Association of Zimbabwe (meant) to engage local authorities to persuade them that real estate in depressed locations has to be looked at.”
In light of the increasing voids in the CBD against high demand for residential space, the country’s leading property players, in conjunction with the City of Harare are exploring several options to remodel current buildings into alternative uses in line with market trends.
The MD for Mashonaland Holdings, which owns numerous buildings in the heart of Harare, Gibson Mapfidza, earlier indicated that the big five property companies in Zimbabwe were advocating for local authorities to consider an application for conversion of Harare CBD properties into residential use.
Notably, the decay of the inner city is a worldwide phenomenon with corporates moving out to less congested areas.
Old Mutual Zimbabwe non-executive director Jonas Mushosho, at a previous AGM, commented on the need for alternative building usage in the CBD:
“This has happened in other areas too like in South Africa’s central Johannesburg for instance, where companies have moved to areas like Sandton. This is always followed by a process of renewal of the inner city. We think some of the buildings in the city need not be refurbished only but to think about alternative uses.”
Old Mutual owns several buildings in the capital’s CBD and holds the largest property portfolio in the country.
This is akin to the repurposing of Johannesburg CBD properties into residential spaces over the past two decades. With the opening up of new business centres elsewhere, major firms have over the years relocated their major business operations from the CBD. On the cards currently are plans to rejuvenate the Jo’burg (Johannesburg) CBD, as well as neighbouring areas such as Berea, Yeoville, Fordsburg and Marshalltown, among others.
The Real Estate Institute of Zimbabwe (REIZ) president Mike Juru is on record for having expressed that demand was currently on the residential properties side ahead of office space, especially in the CBD.
Indications are that business in the CBD has been on a downward trajectory as real estate commercial clients move to surrounding residential areas or Office Parks to escape congestion in the city.
Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis.