- Office spaces to be converted into student accommodation and residential flats
- Revenue for HY2020 was down 29%
- Vacancy at 23%
Harare – Zimbabwe Stock Exchange (ZSE) listed real estate holding company ZimRe Property Investments has it in the books to convert its Harare CBD properties to alternative uses that include student accommodation, boutique hotels and residential apartments in a bid to increase revenue and minimise vacancies.
This was revealed by the company board chairperson, Jean Maguranyanga, in a statement accompanying the company’s results for the half year ended 30 June 2020.
“The company is pursuing possibilities of converting Harare CBD properties to alternative uses. The First Street and Nelson Mandela corner is the immediate target area,” she said.
In the same statement, she revealed that total revenue for the half year declined by 29% to ZWL27.06 million from ZWL37.96 million achieved in the first half of 2019 while average portfolio vacancy rate marginally worsened to 23% from 22% over the reporting period with the Harare CBD office, Bulawayo CBD office and the Gweru industrial facility recording the highest void rates.
In an interview with this publication, ZimRe Properties Finance Director, Nyasha Zhou said that these increased vacancies are appearing as a result of primarily tenants taking up less space in buildings as a means of reducing costs within a rocky economy, while some were leaving CBD properties to avoid congestion and decay as well as the COVID 19 pandemic forcing more and more people to abandon office spaces , opting to work from home were the motivation behind the move to convert the properties to other alternative uses that would ensure profitability.
“Vacancy rates in CBD offices are generally increasing because tenants are opting to rationalise their space within buildings as a cost management strategy but also as a result of COVID 19 people to work from home and therefore not requiring office space in the CBD and also the general decay and congestion in the CBD which is forcing tenants to reduce space and in some instances leaving altogether so the motive is to try and look at other alternatives that could generate revenue and better utilise the space.”
The company is primarily targeting to turn their spaces like First Street and Nelson Mandela Corner in the Harare CBD into student accommodation and educational spaces available for lease to universities such as Midlands State University (MSU) and the National University of Science and Technology which are currently operating in spaces described by the Financial Director as not being suitable for university operations.
“One of the buildings we are targeting is looking at student accommodation, we think that there are institutions around Harare that are operating from spaces that I think are really not suitable for university operations such as MSU operating from Kwame Nkrumah and NUST from the ZIMDEF building so we want to create spaces tailor made and suitable for those types of uses that will increase our revenue in flows,” Mr Zhou said.
The company already has operation at their NICOZ house property on corner 8th Street and Fort Street in the Bulawayo CBD where they offer students in the city accommodation.
The Harare CBD project however is anticipated to commence in 2021 and is likely to be a medium to long term project with design concepts already have being agreed on between the company and its architects.
Equity Axis News.