Despite uncertainties caused by the Covid-19 pandemic on investments, market watchers contend the real estate sector still offers great opportunities for individual and corporate investors.
This comes as the sector is projected to maintain a growth this year as it trails the anticipated uptick in the economy supported by buoyancy in agriculture and mining.
Rawson Properties Neighbourhoods report for the fourth quarter of 2021, Real Estate showed signs of recovery and was estimated to grow 4,1 percent in 2021, which is projected to spill over into 2022 at 1,7 percent against a negative growth in 2020 of -33,7 percent.
Real estate has always been a safe haven for investment during uncertain periods and a perfect hedge against inflationary pressures for instance.
While economic uncertainties continue to linger due to the pandemic amid fears of new waves hitting global economies, Zimbabwe included, the Rawson Neighbourhoods report emphasises that investors may get peace of mind from the real estate sector.
“Despite the effects of Covid-19 to an already ailing economy, real estate still offers great investment opportunities for both corporates and individuals,” reads part of the report.
The year 2021, opened under hard lockdown measures triggered by the steep surge in Covid-19 cases, while the general business environment remained challenging.
This had a negative impact on tenant cash flows, also affecting collection rate.
Due to the challenging environment, commercial development activity also remained limited during the first half of 2021 as a result of the supply demand imbalances, according to property firm First Mutual Properties (FMP).
The majority of development activity remained in the industrial or retail warehousing sectors, while limited owner occupied office park style buildings are ongoing.
The residential sector development activity remained strong, and expected to continue on a growth trajectory mainly supported by the informal sector of the economy and the diaspora community.
Apart from the residential segment, the Neighbourhoods Report also sees potential in the industrial segment.
The industrial market is already showing signs of improvement with refurbishment of old stock and new builds mostly concentrated on warehousing and wholesaling.
The segment is supported by increased activity and growth in other sectors of the economy in need of warehousing facilities, which has propelled demand.
In light of strong agricultural performance, improved mining sector uptime, growing capacity utilisation and a stabilising inflationary environment, Zimbabwe is expected to record higher than anticipated economic growth.
However, further disruptions caused by the Covid-19 pandemic may dampen the anticipated economic recovery rate.
“Mining, agriculture and retail activity is pushing demand for warehousing facilities.
There is a lot of activity in acquisition or development or redevelopment of light industrial properties and warehousing opportunities targeting the e-commerce, logistics and agro-based and mining businesses.
“E-commerce activity and logistics business is expected to rise as we see greater adoption of technology and online business,” said the report.
By the end of 2021, there were not many changes in the office space due to weakening demand, high voids and an ageing stock.
“However, the Government through its various bodies has managed to acquire and refurbish office space within the CBD,” said Neighbourhoods.
But there have been several changes happening within the suburban office segment as migration from less desirable central business district (CBD) market segment continues.
In Harare, companies are setting up head offices along major roads such as Emmerson Mnangagwa (Enterprise) Road, Glenara Avenue, Samora Machel Avenue and Liberation Legacy (Borrowdale) Road.