INSURANCE giant Old Mutual(OM) Zimbabwe has embarked on an aggressive drive to increase occupancy rates at its shopping malls in Harare and Chtungwiza on the back of economic recovery,a senior executive has said.
Acting Business Editor
OM chief executive officer Jonas Mushosho told NewsDay Business in an exclusive interview recently that the company had crafted strategic plans to attract new tenants at its flagship WestGate Mall, Chitungwiza and High Glen Shopping centres after the properties became white elephants at the height of the country’s decade long economic contraction which ended in 2009.
“Our shopping centres were all affected by the economy during hyperinflation. Most businesses had collapsed, the shops were empty.
“They could not afford to pay their rentals and as a result a lot of people moved out of the shopping malls. As the economy began to recover, we worked out various strategies to resuscitate the shopping centres,” Mushosho said.
“So we do have a strategic plan for each of the shopping centres taking into account the special circumstances or context surrounding each shopping centre. If you look at WestGate, it was our flagship shopping centre and probably it was hardest it.
“We came out with a plan over a given period and the plan was aimed at making sure that we take WestGate to its original position. What we did was to find two major tenants—Pick n Pay and Bon Marche.
“We also refurbished the cinemas and assisted our tenants by making sure that we gave them low starting rentals to ensure that they re-equip and retool.”
Mushosho said the company had adopted to grow occupancy levels at High Glen shopping driven by the thriving small to medium enterprises in the high density residential area of Glen View.
According to a government commissioned FinScope Macro, Small and Medium Enterprises (MSME) Survey of 2012 Zimbabwe has 2,8 million MSME owners in Zimbabwe, owning 3, 5 million businesses, employing a total of 2,9 million people excluding the business owners.
“The nature at the moment is such that it is being driven going into the future by SMEs, therefore, we have taken High Glen as the model where we want to make sure that we make room for the sector,” he said.
He said Old Mutual had entered into an agreement with various associations representing SMEs which resulted in the company partitioning into sizes that are suitable and convenient for the sector. Before this arrangement big retail chains which have since vacated used to occupy the property.
Turning to Chitungwiza shopping centre which he said was “literally dead”, he said the company found anchor tenants such as OK Supermarket and six banks, adding that business activity was picking up.
Demand for industrial space according to a Knight Frank Africa Report for 2013 continues to decline on the back of subdued economic performance while retail space demand has remained high as the country becomes a net importer.
“There has been an uplift in retail prime rents for new lettings in Harare of about 60% during 2012, but the sustainability of the achieved rents is doubtful in an environment of weak consumer spending,” the report read in part.