11 Jun Gov’t plans Cause for Optimism Says Property Exec
“The property market abounds with pockets of high yielding opportunities,” says Gibson Mapfidza, the managing executive of Mashonaland Holdings, one of Zimbabwe’s leading real estate investment and development firms. Despite Zimbabwe’s macroeconomic challenges, which remain well documented, he is optimistic on the opportunities for investors especially within the sector, especially with bulk infrastructure services and the development of what are referred to as ’emerging asset classes’ by Africa’s expanding class of property investors. Mapfidza’s comments come ahead of the second annual ZimReal Property Forum taking place on the 17th July 2019, which will welcome 300 leading local and regional investors and developers eyeing current and future opportunity in a property sector ripe for innovation. In a market where freehold sales remain depressed; landlords have adopted aggressive rent review strategies in order to preserve assets value and hedge income streams against currency inflation explains Mapfidza.
“Investment property owners have sought to preserve value through rent reviews from January 2019. On average the industry achieved reviews ranging from 30 – 80 % depending with location, size of leased premises, grade of building and quality of tenants,” he says. Despite the current operating environment, Mapfidzais confident that the Government’s Transitional and Stabilization Policy (TSP), if implemented in full, will lead to green shoots of recovery and sustained growth in the sector. As Mapfidza says, “The TSP by the government, aimed chiefly at reducing fiscal deficit to restore macroeconomic stability, while maintaining investment infrastructure and priority social spending, among other necessary interventions, seems to be taking the economy in the right direction and fruits are expected to show in the medium to long term.”
And although the development submarket remains subdued due to lethargic economic growth, he argues that Zimbabwe’s real estate sector shall have to redevelop regardless, as current building stock is outdated and too expensive to upgrade. In addition, he notes that new and appealing development corridors have emerged as corporate occupiers continue to exit the CBD for various reasons. “There is a general consensus that the property market lacks quality buildings providing the required functionality and operational efficiency for the modern corporate occupiers,” adds Mapfidza.
In his view; the revitalization of Harare, as communicated recently by the City of Harare’s gazetting of Local Plan Number 39 in May 2015, which converted Avondale and parts of Alexander Park from a dominantly residential to a commercial district, provides the impetus to redevelop. In addition to the actual buildings, there is an opportunity to upgrade the bulky infrastructure services to suit the new uses. Comments Mapfidza, “This presents a good opportunity for bulk infrastructure (sewer, water, roads) investments if the Local Planning Authority puts in place an enabling framework to attract private sector investment in this sector previously dominated by local government.”
While this is a departure from the traditional model employed in Zimbabwe, Mapfidza’s view is that urban land use changes to suit dynamic business and citizens occupying space requirements like the Local Plan Number 39 will jumpstart development within the sector, provide jobs and bring in the much needed FDI investment. “The change of use presents an opportunity to develop modern office park buildings that are highly energy efficient – retrofitting old buildings to improve their greening credentials has proved very costly.” As the traditional commercial real estate sector players grapple with reinventing themselves from a history of “overinvesting in traditional property sectors”, he believes there is a significant opportunity to invest in alternative real estate previously dominated by owner/occupiers. “There is more realization bylocal corporate occupiers and operators alike that they need to deploy more resources to their core businesses and allow property investors to provide real estate infrastructure for them through leaseholds.”
For him, the most significant opportunities include: “student accommodation, hospitals, hospitality infrastructure, bulky and flexible warehousing, social infrastructure (e.g. schools, churches and community halls) and bulky infrastructure including roads, water and sewer reticulation.” As one of 45 key industry leaders speaking at this year’s ZimReal Forum, Mapfidza will share this year’s stage with a number of regional and local investors and developers as they explore this year’s theme ‘Navigating opportunities within the Built Environment.” As he comments, “The ZimReal Forum helps bring together regional experts and share notes on how we should move the industry going forward. Essentially, it helps create an interface between the private and public sector and share perspectives especially on what the public sector needs to do to attract private sector investment. The consensus built helps the market to give consistent market information to especially international investors thereby building confidence in the local market.”
Released by: Murray Anderson
Head of Communications
API Events / The Zimreal Property Forum
About the ZimReal Property Forum
The ZIMREAL Property Investment Forum is a conference centred around the Zimbabwean real estate sector. This one-day forum is a unique platform for senior local and regional investors, developers and practitioners together with their public sector counterparts to develop a strategic roadmap to stimulate economic growth through property investment and development. Featuring keynote addresses, interactive panel discussions and case studies from local and regional experts, this high-calibre event provides the premier platform for networking, deal making and insights for the local property market.
About API Events:
API Events is a pan African producer of B2B real estate summits. Currently the company host nine events across Africa which take place in Zimbabwe, Zambia, Botswana, Mozambique, South Africa, Kenya, Lagos and Cote D’ Ivoire.