One of Zimbabwe’s biggest property developers, Mashonaland Holdings Limited (Masholds), is planning several office parks in Harare’s prime suburban commercial nodes, including Belgravia and Borrowdale, as demand continues to shift away from the capital city’s crowded central business district (CBD).
“We are developing outside of the CBD,” Masholds chairperson Grace Bema told businessdigest.
“We are looking at developing several office parks outside the CBD. For example, in Belgravia and in Borrowdale as well. That is how we are looking to counter these changes,” she said.
“We have had some people or companies, organisations, leaving our CBD offices, obviously going into suburban offices,” she added.
The plan reflects growing confidence in Harare’s suburban office market, where businesses are increasingly relocating in search of modern office space, greater convenience and improved operating environments. According to property consultant Knight Frank, Grade A office space in suburban areas commands net rentals of more than US$10 per square metre per month under triple-net lease arrangements, compared to average CBD rentals of about US$5.
This highlights the weaker demand prevailing in traditional CBD locations.
Keep Reading
- Masholds splashes $142m on shareholders..as group red flags high interest rates
- Sharp drop in demand for CBD office space
- Crumbling infrastructure holding back property market
- Masholds hedges against CBD rentals drought
The divergence in rental performance comes amid persistently high vacancy levels in the office market. Knight Frank estimates vacancies at approximately 60% in Harare and 40% in Bulawayo, while tenant default rates remain elevated at around 35%. Against this backdrop, developers are increasingly targeting well-located suburban commercial hubs that offer stronger occupier demand and better rental yields.
Masholds’ office portfolio remains its largest asset class, valued at US$45,41 million at the end of last year. It is followed by industrial, retail, residential and healthcare properties, as well as land banks.
The group noted that well-located and serviced developments continue to outperform older CBD office stock and less competitive assets, placing pressure on its city-centre portfolio.
Despite these challenges, overall portfolio occupancy improved to 89%, supported by strong tenant retention, proactive leasing initiatives and continued engagement with tenants.
“We are reducing the sizes of the (CBD) offices to cater probably for SMEs, because that is what we have in the CBDs now,” she said.