Six 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 echoe 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.
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 also 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 would-be 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.
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 in a 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.
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