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The prevailing economic conditions have had an effect on the demand for property space

Tinashe Makichi Business Reporter

The current challenging economic environment has forced Old Mutual Zimbabwe to change use of buildings for some of its properties. Old Mutual Investment Group managing director Marjorie Mayida told the Herald Business that the prevailing economic conditions have had an immense effect on the demand for property space.

“The current difficult economic environment which has resulted in weak demand for almost all commodities and services, has also affected demand for property space. This has seen companies either closing or downsizing on space requirements in line with declining earnings. There are considerations to change use of buildings,” said Mrs Mayida.

For that reason some factories have become warehouses or some offices or retail space have been reconfigured to suit small business enterprises’ requirements.She said in a normal economy void levels should be around 5 percent but at the moment depending on sector, void levels can be as high as 30 percent.

“Voids arise for a number of reasons. So in dealing with voids one has to look at the reason and react accordingly.Old Mutual embarked on various operating costs reduction strategies aimed at reducing the overall occupancy costs for the tenants. Measures have also been put in place to align the service offering package in line with changing trends,” said Mrs Mayida.

“In short, a cocktail of measures is needed to counter voids, and it depends on the sector where these occur,” she said.At the moment, Mrs Mayida said the group is committed to the Small and Medium Enterprises market development where they will usher modern premises for smaller businesses.

“We started working on this SME concept in 2012, so this means that we are already considering future projects, mindful that project gestation period can span a number of years. We are in the business of property management as one of our product offerings. So we are on the lookout for existing portfolios that we can manage on behalf of customers, given the depth of our skills in property management,” she said.

Mrs Mayida added that the group is also looking out for relevant property sectors where there is growth so as to enhance yields for customers. She said just like any other business, the current difficult operating environment has had a negative impact on the business operations.

Mrs Mayida said the group’s view is that such economic cycles come and go and the strategy is to keep the business fit for the current environment.Old Mutual Zimbabwe offers services to Zimbabwe-based clients via a focused range of products including Life Assurance, Asset Management, Unit Trusts, Property Development and Management, Short-term Insurance and Banking Services.