Mashonaland Holdings CEO Manfred Mahari says letting business has been affected by the exodus of international companies and organisations during the country’s decade-long economic crisis, depriving operators of quality tenants.
Mahari told NewsDay that the challenge has been compounded by the recent decomposition of chain office and retail space into many small units, which upcoming local entrepreneurs can afford.
“A lot of international head offices have moved out of the country to neighbouring countries leaving our upmarket properties empty. The trend continues although it has slowed down,” he said. Mahari said currently, there was a huge demand for smaller shops but they were not appealing in terms of aesthetics.
“One might argue that the demand is now for smaller shops and bigger shops like Barberman and Greatermans are not affordable for a number of retailers. But you will realise that the rent that is paid per square metre in smaller shops is bigger than that paid in bigger shops. Besides those little shops are not good in terms of the aesthetic look of the city.
We need big shops where someone can walk in and see goods on display,” he said.
In its results for the year ended 30 September 2010, Mashonaland Holdings reported that revenue from rentals have pushed the property market upwards although the company expressed reservations that the sector was not yet on safe ground as the country makes a slow recovery from a decade of economic haemorrhage.
In his report, the chairman, Elisha Mushayakarara, said despite renewed interest in the local property market from foreign property investors, the country’s negative public image and the high country risk still continue to weigh negatively against Zimbabwe.
“However, the group’s quality property portfolio and its relatively solid and stable tenant base should enable it to continue achieving sustainable and growing rental income,” he said.
Mushayakarara said the major performance driver for the year ended September 30 2010 was mainly rent adjustments to market levels.
“Rentals in pure retail sector firmed from $1,65 per square metre in September 2009 to $8 at the end of the year buoyed by improved activity in the retail sector,” he said.
Mahari told NewsDay that although rentals were doing well elasticity challenges linked to the illiquidity of the economy may pose future challenges.