INVESTOR confidence in Zimbabwe’s real estate sector is increasingly anchored on adaptive commercial models that can withstand economic uncertainty, economists have said.
Analysts say the shift reflects a broader transformation in retail and property investment, as capital flows away from traditional central business districts towards flexible, income-generating assets such as shopping malls, mixed-use developments, and informal-sector-linked retail spaces that are proving more resilient in a volatile economy.
This comes as industry projections valued the sector at US$85 billion last year, with expectations of growth to US$104 billion by 2030.
Against this outlook, institutional investors — mainly pension funds and asset managers — are channelling capital into income-producing commercial assets such as office blocks, retail centres, and mixed-use developments that offer more predictable and defensible cash flows.
A recent real estate sector report by IH Securities noted that this shift in investment appetite is also reflected in the rapid emergence of small shopping malls across the country.
“In essence, investor confidence in malls is less about confidence in broad economic growth and more about confidence in adaptive commercial real estate models that can survive volatility,” economist Chenayi Mutambasere said.
She added that old retail spaces are increasingly being converted into malls due to wage stagnation and a lack of formal employment, with consumers prioritising flexibility and convenience.
“Several factors are driving this decline. First is the erosion of disposable incomes due to inflation, currency instability, wage stagnation, and lack of formal employment,” Mutambasere said.
“Consumers are now prioritising essential purchases and increasingly buying in smaller quantities from informal traders or neighbourhood tuckshops that offer greater flexibility and convenience.”
She said that malls are increasingly becoming hybrid economic ecosystems rather than purely shopping centres.
“This broader utility makes malls more adaptable during economic downturns. Mall developments increasingly accommodate smaller traders through kiosks, partitioned retail units, and flexible leasing arrangements,” Mutambasere said.
“This allows investors to tap into the growing SME and informal retail market, which has become one of the most active sectors of the economy.”
This shift is also reshaping broader wholesale and retail dynamics, as informal trade and imports take a larger share of consumption.
Economist Vince Musewe said the wholesale and retail sectors are now largely being driven by the informal sector and imports, reshaping traditional retail dynamics in the country.
This trend is reinforced by research from global real estate consultancy Knight Frank, which found that the informal sector offers a wide range of low-cost merchandise, from street-front stalls to small lettable shops. As a result, it is drawing consumer spending away from large retail boxes, which are under growing
pressure.
This change is also influencing property investment decisions, with investors increasingly factoring in informal trade and remittance-driven consumption when assessing retail real estate opportunities.
“As far as I am concerned, that is the new retail sector business model,” Musewe said.
“US$2,7 billion per annum in diaspora remittances is fuelling consumption, and this is likely to continue. It is a needs-based economy driven by informality.”
At the same time, traditional urban retail hubs are under pressure.
Knight Frank found that several multi-storey buildings in the central business district (CBD) have been listed for sale, signalling a broader shift by investors away from the CBD amid deteriorating infrastructure, high operating costs, rising crime levels, and persistent congestion.
This retreat from CBD assets aligns with the view that consumption is increasingly driven by informality and imports, and that retail activity is migrating from formal city-centre structures into more flexible, dispersed trading formats.
The shift resulted in void rates estimated at 60% in the Harare CBD and 40% in Bulawayo.
“Traditional business has moved to the suburban malls, where there is a risk of overheating,” economist Tony Hawkins said.
“Property investors always overshoot, and a slump follows. The tax and regulatory environment favours the informal sector.”
However, he warned that the proliferation of small tuck shops might be used for money laundering.
“There is an element of money laundering in some of these developments, and the business models we see today are more a reflection of an environment in which free markets have become so dominated by crony capitalism and state capture that market norms no longer apply,” Hawkins said.
