The Sunday Mail
Tinashe Makichi and Chipo Sabeta
Zimre Property Investments’ (ZPI) plans to dispose of properties in Harare’s Central Business District have been held back by low prices obtaining on the market, among other key economic factors.
The listed property development and management firm also cited the issue of widespread and deepening currency challenges as the major reasons.
ZPI is in the process of disposing some of its properties located in Harare’s CBD, as property business in the country has become unprofitable.
ZPI owns the Zimre Centre located at corner Leopold Takawira Street and Kwame Nkrumah Avenue in Harare, among other large properties in the CBD. Managing director, Edson Muvingi said following the rise of the informal economy in the CBD, many tenants have moved out, preferring office parks.
He said the company has thus far disposed of only one property in the CBD and the proceeds are enough to fund construction of the Victoria Falls shopping mall.
As part of their property portfolio expansion, ZFI will construct the $13 million shopping mall in Victoria Falls, scheduled to start on January 15 this year.
“Demand for property business is becoming slow due to less value in office space. Most official companies prefer office parks outside the CBD due to the high rise informal market.
“It’s for that reason that we are still in the process of disposing of some of our assets in the CBD and so far we have sold one building but I cannot disclose the identity at the moment. The money raised from the sale is enough to build the shopping mall in Victoria Falls.
“I have always said this in briefings, our portfolio is office heavy hence the need to spread our properties. We are eyeing areas outside the capital, hence Victoria Falls is a top priority,” said Mr Muvingi.
Due to the prevailing tight liquidity environment, tenants are failing to pay current rental rates and re-negotiating existing contracts. This has resulted in declining revenues.
“It is a difficult scenario whereby we invest in properties using hard currency cash yet upon selling them, we get soft money. Such major economic dynamics have slowed down our ability to sell the properties.”
Corporate interest in CBD offices has waned on account of the congestion stemming from informal businesses, including street vendors. The company said it is finalising leases with various tenants for the Victoria Falls mall this week, whilst contractors are already on site to start construction.
The ground breaking ceremony is slated for February 2, 2018.
