A leading real estate company says the property market has performed relatively better than other investment avenues such as the stock market and the money market.
By the Business Reporter
In its mid-year property market report, Bard Real Estate, however, said the sector continued to face a number of challenges.
It noted that property values in Zimbabwe were low, adding this was the right time to invest in property.
“Property’s ability to generate income, even in difficult operating environments, has proven to be its main attraction, unlike most listed companies on the Zimbabwe Stock exchange which have failed to declare dividends for the last three years, depriving investors of any return,” Bard noted in the report. The real estate entity indicated the major drawback in the country’s property sector was inability of tenants to meet their lease obligations.
The report noted that arrears, bad debts and collection charges were ballooning. “Good tenants with strong covenants are not there anymore; this is one of the biggest concerns on the market,” Bard said.
“Office rentals are currently depressed due to rising vacant office accommodation, thereby affecting any upward rental adjustment.”
The retail market, according to Bard, remained a better performer compared to office and industrial sectors, while operating costs were deemed too high and unaffordable. According to the report, residential property values have come down although sellers were still asking for exorbitant prices a development that has left such properties without takers for more than a year. Bard noted that the country’s rentals were still trailing those charged in the region.
“International investors will only be attracted to invest unless if the rentals will adjust to accommodate an accepted rate of return,” the company said.