Mishma Chakanyuka, Staff Writer 
RESIDENTIAL property has remained the best-performing segment in Zimbabwe’s real estate sector amid housing shortages in the country, according to a new report.
Last year, the segment registered the highest number of transactions and constituted the bulk of activity in the construction sector.
“The growth was fuelled by diasporans through remittances, employer-assisted mortgage schemes, and business executives who have the financial means to build their own houses. The average rental yield for residential real estate in 2022 was eight percent,” research firm, IH Securities said in its 2023 real estate sector report.
Zimbabweans have suffered from shortages of affordable housing options with the 2023 Zimbabwe Vulnerability Assessment Committee (ZimVac) report indicating that rented accommodation continues to be an economic survival strategy.
According to the report, Harare had the highest proportion of households without title deeds at 21 percent, which could be attributed to the fact that it houses the most people among the 10 provinces.
Concerning the commercial property, IH Securities said the central business district (CBD) offices were the worst performing owing to a policy that allows residential suburbs that are close to the CBD to serve as commercial property.
“Migration of offices from the CBD into the suburbs has been more pronounced which has led to an oversupply of CBD office buildings vis-a-vis demand. Consequently, there have been high vacancy rates and unsustainably low rental rates for CBD offices,” read the report.
While there has been a fall in demand for offices from big corporations, demand from small and medium enterprises is growing, as such, prompting CBD property owners to repurpose their buildings to accommodate small and medium-sized enterprises.
Consequently, vacancy rates have remained high because demanded space is smaller.
The boom in demand and high average occupancy rate has been witnessed for suburban office space and according to Knight Frank, most landlords in the Northern suburbs are experiencing a 100 percent occupancy rate for their spaces.
IH highlighted that the retail sector has been resilient despite the low consumer disposable incomes in Zimbabwe, as informal traders have been causing a boom in the retail market and vendors flooding the CBD to maximise the high volumes of traffic.
“In recent times, there has been a surge in ‘maRunner’ who sell clothes, consumables, and other niche items at a discounted price to drive out higher volumes. These retail traders have driven the demand for space in the CBD,” IH said.
“New complexes are being constructed for example the Madokero Shopping Mall, Highland Park Shopping Complex (almost complete) and Pomona for more retail space.”
For industrial property, there is currently a short supply of industrial space, which has left demand unfulfilled.
According to a report by Knight Frank, private players and corporates have made significant investments in this sector to increase the supply of space in new industrial developments in Mount Hampden, Msasa, Madokero Business Park and Pomona Industrial Parks, which have become major economic zones.
“Power outages, poor water supply, low-capacity utilisation and deteriorating infrastructure have been slowing the growth of the industrial real estate sector,” read the report.
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