AFRICA
Zimbabwe Property Market On the Up
Primed for Investors
S
ix months after the resignation of Robert Mugabe , rumours of Zimbabwe ’ s economic recovery abound . What does this mean for the property industry ?
“ Zimbabwe has turned a corner and is ready for investment ,” says Ben Burr , managing director of Cushman Wakefield Excellerate Zimbabwe . His sentiments echo a tagline coined by President Emmerson Mnangagwa , and which is borne out by the country ’ s many assets , including an educated , hard working population ; fertile land ; mineral wealth ; exciting tourism attractions and a regionally strategic geographic location . With efforts to clarify land reform and indigenisation , and initiatives to attract foreign investment , the country offers outstanding potential for investors in all sectors .
New developments
This is particularly true of the property sector , Burr says . “ Many new investment opportunities have been created , with expanding infrastructure helping to develop new nodes , while increased agricultural and mining output will stimulate demand for more industry and industrial properties .” Burr also notes that there is a shortage of housing . Should mortgages become more affordable and accessible , this area is poised for massive development . Meanwhile , the commercial property sector is set to receive a boost as the economy grows .
It ’ s not surprising , then , that Burr reports a significant increase in investor interest , especially from Europe and the United States . While this was actively discouraged under the previous regime , the upcoming elections ( scheduled for July ) are expected to consolidate and legitimise the current government and this , in turn , will provide the assurance that wouldbe investors crave , especially in terms of policy continuity .
The areas most likely to attract investor interest include those associated with mining , agriculture , tourism and logistics . Geographically , sites on the main roads , next to dual carriageways or near rail access points into town are especially noteworthy . Burr observes that the retail sector is also being eyed by investors : “ We ’ re anticipating significant growth here , as the largely unemployed population is expected to move away from informal retail and trade to take up formal employment ,” he explains .
What to look out for
That said , those eager to take advantage of these developments would do well to remember that Zimbabwe ’ s property market is unlike that of other countries . Burr warns that there are many potential pitfalls for those who do not conduct thorough research . “ It ’ s advisable to engage a local partner with in depth local knowledge , and to spend time in the country ,” he recommends .
Critical issues investors need to be aware of include the parallel market for currency that has developed as a result of insufficient currency liquidity . Because of this uncertainty around currency , property sellers are reticent at present ; reluctant to part with a hard asset in exchange for a currency which could devalue rapidly . This situation is expected to improve as directives are relaxed , with government agreeing to consider exchange control on a case by case basis going forward .
Against this backdrop , what does the future hold for Zimbabwe ’ s property market ? “ If the upcoming elections proceed peacefully and transparently , we anticipate a significant increase in foreign interest , confidence and investment flows ,” Burr says . “ New opportunities will arise out of new infrastructure projects . Finally , we believe land prices will increase , while building prices should trend downwards ,” he concludes .
54 JUNE / JULY 2018 SA Real Estate Investor Magazine