Rentals for commercial and industrial properties in Bulawayo, currently ranging from $4 000 to $30 000 a square metre depending on use and location, are still among the lowest in the region and in the world, a property consultant has said.
Oswald Nyakunika, the managing partner of a leading property firm, said if landlords had been asking for rentals that were too high, they would not be leasing out any space, thus creating huge voids.
“In any economy where voids are over 10 percent, it is indicative of excess space, which will force landlords to reduce rents,” he said.
“However, our void rate in Zimbabwe is well below six percent, which merely reflects the movement of tenants from one premise to another. It perhaps gives credence to the widely held view that our rents are still the lowest in the region and the world.”
Several tenants have complained about steep rentals in the city, with one report saying that Nkulumane Shopping Complex was fast turning into a white elephant because tenants were leaving owing to high rentals.
Members of the Affirmative Action Group at one stage besieged the offices of Nyakunika’s firm complaining about high rentals.
According to Nyakunika, shops in the central business district (CBD) of Bulawayo should be commanding rentals of between $20 000 and $30 000 a square metre.
Offices in the CBD should be going for $15 000 to $20 000 a square metre, while factories in the prime industrial areas should go for $6 000 to $8 000 a square metre.
Nyakunika said the rentals applied to standard shops ranging from 75 to 100 square metres. Rentals for bigger units could be reduced according to zoning or quantum.
Zoning was when rent was reduced in relation to the distance from the front of the shop while quantum referred to a reduction based on the size of the shop.
He said most large supermarkets and national retail outlets were now paying rentals based on turnover, allowing rentals to be linked to business performance.
“Where tenants complain business is not doing very well, landlords have always offered turnover rent as a way out,” Nyakunika said. “In fact, most leases have that option. However, the majority of tenants do not want to share profit with landlords so they object to turnover rents. This is what makes most landlords believe that tenants’ complaints are not genuine.”
A source in the property industry said that while certain landlords were pricing themselves out of the market, some tenants were finding the going tough because they had taken over properties for speculative purposes.
He cited foreign currency parallel market dealers, whose profits were now on the decline.
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