The Infrastructure Development Bank of Zimbabwe is seeking to raise about $70 for housing projects.

THE Infrastructure Development Bank of Zimbabwe (IDBZ) is seeking to raise about $70 million before the end of this year for housing projects across the country.

In a statement accompanying financial results for the six months to June 30, 2017, the IDBZ indicated the projects would be in Kariba, Hwange, Bulawayo, Bindura , Lupane and Harare. “In the second half of 2017, the bank will start implementing the projects, whose tendering and contract award processes for civil works are at an advanced stage,” said the development bank in the statement, which was signed jointly by IDBZ board chairman, Willard Manungo, who is also the permanent secretary in the Ministry of Finance and Economic Development, and the bank’s chief executive officer, Thomas Sakala.

The Financial Gazette understands that the Kariba housing project will deliver about 1 557 high, medium and low density residential stands at an estimated cost of $14,8 million, while in Hwange, the bank is targeting to develop 2 135 high density residential stands estimated to cost about $5,8 million dollars.

In Harare, the bank is planning to service about 370 low density residential stands costing $12,1 million. The IDBZ, formed in 2005 as a vehicle for the promotion of economic development and growth and improvement of the living standards through the development of infrastructure, recently won the tender for the construction of halls of residence for about 6 564 students and staff accommodation for 220 university staff members and teaching facilities at seven State universities.

These include the University of Zimbabwe, Bindura University of Science Education, Lupane State University and Chinhoyi University of Technology. Under phase one of the project, the bank is mobilising about $35 million to finance the construction of students and staff accommodation at three universities namely National University of Science and Technology, Bindura University of Science Education and Lupane State University.

This will require, according to information from the bank, about $75 million which covers about seven universities in Zimbabwe. Apart from the upcoming projects, IDBZ, has so far spent US$3,2 million for housing projects in Harare’s New Marimba Park, where the bank developed about 357 residential stands and is in the process of developing residential stands in Masvingo’s Clipsham suburb. The Masvingo project entails the development of 205,7 hectares of land into residential, commercial, industrial and institutional stands on Lot 2 of Clipsham, a site located some five km outside Masvingo town along the Masvingo-Beitbridge highway.

The project is targeted at developing 704 low density residential stands, 26 service industrial stands, 24 institutional stands and 16 commercial stands. Clipsham Views is the newest and most exciting housing development in Masvingo, with beautiful scenic views and unique landscape. The bank’s net profit went up 16 percent to $196 572 during the half year period to June 30, 2017 from $169 720 recorded in the matching period the previous year.

The bank said the profitability was “weighed down by the impairment of a non-performing loan to Meikles”. It said the loan was a residual exposure from discontinued non-mandate business of availing short-term facilities to corporate. Its total assets went up marginally to $160,4 million during the period under review from $159,9 million recorded in the same period in previous year.

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The property company has 92 properties valued at $137 million spread across the country.

By Nyasha Chingono

PROPERTY concern, First Mutual Properties (FMP), which was rebranded from Pearl Properties last week, is planning an $8 million budget for the acquisition of land and buildings.
FMP managing director, Christopher Manyowa, said the cash was for projects in Harare and Karoi, a farming town in Mashonaland West.
“We are still formulating the projects, but the estimate is US$$8 million. That involves the acquisition of the properties and also the development of the actual buildings,” Manyowa told The Financial Gazette last week at the company’s annual general meeting held in the capital.
He said the projects involved partners, whom he declined to reveal.
“It’s a bit premature because we are still holding discussions and we are bound by non-disclosure agreements that we have with the partners. We are currently focusing on Harare and Karoi,” said Manyowa.
Chairman, Elisha Moyo, said the company would seek long term opportunities going into the second half of the financial year following a relatively poor start to the year.
“We continue looking ahead to grow the portfolio into the long term by actively seeking opportunities for acquisitions and pre-let development, while reinvesting into the existing income generating properties in order to maintain quality of the buildings and ensure sustainable earnings through managing occupancy and rental levels,” Moyo said in a statement accompanying financial results.
Manyowa said the property concern would immensely benefit from the financial muscle of the First Mutual Holdings Limited, the parent company of FMP, through the rebranding exercise which was approved last week.
He said the company would leverage on synergies with the mother brand.
“What (the rebranding) does is get us closer to the mother brand and we will be looking at exploiting the synergies. Our view is that we will leverage on the size and capacity of the life company and other group companies in terms of its financial muscle,” said Manyowa.
The property company has 92 properties valued at $137 million spread across the country’s major cities like Bulawayo, Gweru, Kwekwe, Mutare among others.
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As of February this year, 428 of the 1 379 elevators and escalators installed in Zimbabwe were not working.

AN increasing number of property owners are not servicing or repairing elevators and escalators in their buildings, with nearly a third of the machines installed in the country falling into disrepair, The Financial Gazette can reveal.
According to a report presented recently by John Mutswatiwa, the chief inspector of factories at the National Social Security Authority (NSSA), to a building maintenance meeting of the country’s real estate players, as of February this year, 428 of the 1 379 elevators and escalators installed in Zimbabwe were not working. This is a huge increase from only 170 elevators that were not working in 2012, out of 1 328 installed elevators then.
It costs more than $1 000 just to service the machines per month, and the cost varies depending on size, age and other factors. The cost is higher for repair of these machines when they have broken down, he said.
This has resulted in many property owners —most of whom are battling to contain maintenance costs — ignoring servicing of the machines.
According to the Factories and Works Act Chapter 14:08, which regulates the use of the elevators in Zimbabwe, and the Elevator and Escalator Regulations, R.G.N.No.278 of 1976 as amended, it is an offence to use an elevator without permission.
It is a condition of the permission to use an elevator that the user appoints a competent person or a company that employs such competent persons to carry out prescribed weekly and monthly inspections to ensure they are in safe working condition.
If, during the inspection of an elevator plant, any signs of weakness or failure to operate efficiently or deviation from the norm are observed, the competent person and/or the user have to inform the factory inspector in writing and stop the use of the lift.
They also have to enter the details of the deviations in a record book kept for this purpose without delay.
The user should then make the necessary repairs, with the approval of the factory inspector and in accordance with the regulations, before commissioning or reusing it.
A survey by The Financial Gazette revealed that some elevators on some high-rise buildings in Harare — including those on government buildings — have gone for decades without being repaired, forcing users to rely on stairs.
In the case of commercial buildings, this usually leads to tenants leaving and rentals to fall.
The commercial property sector has been depressed in the past few years as a result of a poorly performing economy.
A 2016 property sector report prepared by the Real Estate Institute of Zimbabwe highlighted some of the challenges the sector is facing.
“Of note, there is a worrying and an ever increasing trend of property voids, rental arrears, defaults and late payments… we have witnessed the shrinking of business activity broadly and the effects can also be seen in the real estate as a sub- sector,” the report said.
“A cocktail of issues has contributed to the trend with the most affected properties being commercial office and large retail space but to a lesser extent compared to the former. Chief among the culprits contributing to the trend is the shrinking of business activity as said before especially at a time when the nation is slowly becoming a net importer of goods and services. The liquidity and cash crisis largely reflects the shrinking of business activity in the economy.
“The shrinking of the economy has thus resulted in an oversupply of offices in the CBD (central business district) as a result of downsizing, closure and re-location of companies from CBD areas to office parks and cheaper converted residential units, especially in the areas closer to the CBD.”
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SOME property pundits believe there are major opportunities for investors or companies on the continent.
While most pundits will agree that the saying “Africa is not for sissies” rings true when it comes to property investment, some commentators believe there are major opportunities for investors on the continent.
Over the past decades, it has been burned into most people’s minds that Africa is a continent of economic and social distress plagued by constant strife, its institutions being rife with corruption and lacking governance.
This might be true for the handful of Africa’s failed states that certainly exist, but is not the case for most of the continent’s nations, which in fact enjoy robust political and economic progress, and are outnumbering the few chaos countries by far.
Many people make the mistake of underestimating the continent, particularly in terms of investment opportunities, for example in real estate.
Yes, Africa’s real estate markets have traditionally lagged behind those of developed and most developing economies, and the level of property investment in sub-Saharan Africa is still comparably low, while tapping potential opportunities sometimes can be met by practical challenges.
Nonetheless, most of Africa is not standing still, but moving up the development ladder at an impressive pace.
“Africa’s economic growth began to accelerate around the turn of the century, following several decades of economic stagnation,” said Peter Welborn, head of Africa at property firm Knight Frank.
“Since 2000, Africa has averaged growth of over five percent per year.
The larger emerging economies of this region, such as Nigeria, Kenya, Angola and Ethiopia, have increasingly been the key drivers of the continent’s growth.
“Tanzania, Rwanda, Ivory Coast and Senegal have also emerged as star performers.”
There are a couple of factors that will drive the African real estate sector in the mid term. One is the continent’s population boom.
Africa’s population currently stands at over one billion and is expected to reach 2,4 billion in just 40 years.
This means that in the coming decades, hundreds of millions of Africans will need additional roofs over their heads.
“This population growth is the strongest underlying reason for the huge demand for accommodation and real estate properties across Africa,” says John-Paul Iwuoha, founder and head of Smallstarter Africa, an investment and entrepreneurship community based in Lagos, Nigeria.
Calling Africa “the hottest property market in the world”, Iwuoha points out the huge number of people migrating into urban areas in search of jobs and business opportunities.
“Going by the current estimates, 300 million more Africans will become city people and urban dwellers by 2030,” Iwuoha says.
This will not only interest private property investors, but also GCC developers. Moreover, governments are not doing enough to solve the housing shortage, which brings opportunities for private developers and foreign investors.
The rise of the urban middle class and the increasing number of expats lured by rapid economic growth are also encouraging modern retail and office developments in many of Africa’s major cities.
“The retail sector will develop rapidly as growing populations and a burgeoning middle class demand greater volumes of more varied goods,” says Ilse French, Africa real estate leader at consultancy PwC.
“The need for economic diversification will support the expansion of non-resource sectors and investment opportunities will arise through an increase in demand for real estate from these sectors.”
According to Welborn, in Africa the global slump in oil prices has been balanced out by other industries.
“Real estate demand stemming from oil companies and the associated service supply sector has eased in all the African oil-driven markets,” he says.
“Conversely, in the retail sector, the demand across Africa from the growing middle class has continued to create a marked increase in activity, particularly in the francophone countries.
Abidjan, the economic capital of Ivory Coast, is a really good example where the proposed schemes are supported by offshore investors.”
Sub-Saharan Africa’s largest cities are currently some of the fastest-growing urban areas in the world.
United Nations forecasts say that the populations of Lagos, Kinshasa and Luanda will all grow by more than 70 percent during the 2010-2025 period, while Dar es Salaam, Kampala and Lusaka are expected to double in size.
Lagos has already overtaken Cairo as Africa’s biggest city, and its population may be close to 40 million by 2050, making it a truly global megacity.
This is already creating shortages and a considerable impact on property prices.
“Prime office rents in Luanda, Angola, are among the highest in the world at $150 per square metre per month,” says Welborn.
According to PwC, other key growth drivers for Africa’s property market are ongoing industrialisation, which is funded by foreign investors, namely China, and growing intra-African trade and investment.
Many developers in Africa are also adopting modern construction practices, including eco-friendly technologies such as solar building integration, climate-responsive building strategies, renewable building materials, recycling and reuse, ecological building materials, low-cost design and the use of innovative design tools.
This can be seen, among others, in new urban developments such at One Airport Square in Ghana, Konza City in Kenya, Eko-Atlantic in Nigeria and Roma Park in Zambia — these countries also have the most progressive property markets in Africa alongside South Africa, Angola, Mozambique, Tanzania, Namibia and Mauritius, according to PwC.
Furthermore, Nigeria is now recognised as Africa’s largest economy as per its current gross domestic product, ahead of South Africa and Egypt.
Large cities in fast-growing African nations will continue to attract more and more people, driving the growth of the real estate market. Consequently, affordability could become an issue, leading to greater urban density and smaller apartments.
Developers that will succeed are ones that are innovative and efficient about how they design and build real estate.
To that end, construction techniques such as prefabricated buildings and 3D printing offer new potential for fast, cheap and eco-friendly development.
It, however, remains to be said that many African countries remain challenging places to do business in general, let alone invest in property.
According to the Doing Business 2016 report issued by the World Bank, no less than 21 African countries are among the bottom 30 business-ready in the world.
With regards to Sub-Saharan states, just three have a favourable long-term investment rating: Kenya, South Africa and Tanzania.
However, this doesn’t necessarily mean that property investors should generally shy away from the continent, but rather prepare and get local assistance to conduct deals.
“Africa’s property markets require careful navigation and international investors and businesses attracted by Africa’s recent progress need to look beyond the macro growth story and understand the micro environment of individual markets,” says Welborn.
He concedes that, by global standards, most property investment markets in Africa are somewhat opaque and rather small.
“But there are opportunities across Africa for the development of well-located, well-planned properties suited to local market demand,” he says.
“The need for high-quality commercial and residential real estate will only increase as the economies of Sub-Saharan Africa grow in importance on the global stage.
“The challenge for both property developers and investors to ensure that the impact and timing of planned infrastructure projects on the growth of their capital city is fully understood.
The timing and the use mix being a key component to ensure real success.”
The importance of a local partner when investing in African real estate is probably greater than elsewhere.
Africa has 54 very different countries with different legal systems and different modes of compliance to these systems.
There is in fact no simple answer to the question of which countries are the best to invest in real estate.
Adding to that, legal certainty can be an issue in politically unstable countries or countries with frequently changing government policies, which requires complex legal considerations with regards to property ownership rights and investment regulations, as well as exit strategies.
Last but not least, the volatility of local currencies against the US dollar also needs to be taken into account.
On the other hand, these risks need to be weighed against significant rewards.
Investment returns from real estate in Africa’s rapidly expanding economies considerably exceed those achievable in most other global property markets.
International property funds with a higher exposure to Africa forecast no less than 20 per cent net annual returns from investing in shopping malls, office blocks or industrial complexes in countries across Africa.

And because the continent has so much catching up to do, opportunities span across almost every sector and market segment.

Demand for high-quality retail, office and industrial space continues to outstrip supply as international and local tenants keep riding the wave of new economic opportunities.

Furthermore, the massive shortfall in residential property across the continent means opportunities for private development on a large scale, and the lack of public funds for such projects provides a wide platform for public-private partnerships.

Apart from that, changing consumer behaviour and rising spending power create demand for different types of real estate, opening up avenues for more specialised developers and niche investors into the market.

“Risk appetite remains an important consideration for any investor in Africa, but for those that can accept and manage these risks, there are significant rewards on offer from the right investment,” says French.  —Property24.com

Engineers have advised that they wanted to contribute sensibly, shape and redirect certain aspects of Zimbabwe’s educational system.

ENGINEERING professionals have resolved to tighten standards and enforce compliance within the industry as part of a raft of measures to protect both the profession and public interest.
The Engineering Council of Zimbabwe (ECZ) and the Zimbabwe Institution of Engineering (ZIE) resolved at their biannual congress held in Kariba this month to take measures to improve standards by weeding out bogus practitioners, strictly vetting foreign engineers as well as requiring lecturers from universities and colleges to get regular industrial attachments to keep them abreast of developments in the field.
In a statement issued after the congress, the bodies said it had been observed that tertiary institutions were churning out half-backed graduates because those who train them lacked appreciation of the practical side of the profession.
“Engineers advised that they wanted to contribute sensibly, shape and redirect certain aspects of Zimbabwe’s educational system so that the knowledge that students acquired theoretically can be applied when the student enters the job market,” the engineering bodied said.
“There was a request to make it compulsory for industrial attachment for lecturers. It has been observed that even though our Zimbabwean lecturers are doing well, some of them must do better. ECZ and ZIE is therefore calling that lecturers, and not only students, should equally be made to take compulsory academic attachments once every academic year to aid practical teaching and learning, which will help promote a stronger link.”
The two bodies said qualified practitioners would be subjected to tougher monitoring of their skills and know-how in a bid to improve professional development.
The engineers want foreigners coming to work on projects in Zimbabwe to go through the vigorous screening process that all local practitioners are subjected to, before being registered with the ECZ and ZIE, for them to practice locally.
In the last few years, a number of high value projects have been awarded mainly to Chinese contractors, who many players in the local construction industry accuse of bringing consultants, manpower and building materials from their countries to the disadvantage of local players.
The two bodies said they would be clamping down on unqualified people who masquerade as engineers and those who are operating without being registered.
“Actions will be taken against engineering practitioners using engineering titles without appropriate licenses as required by ECZ and ZIE. In regard to developing strategies related to enforcement, the ECZ and the ZIE agreed to work together to develop joint strategies and solutions to problems of unlicensed practice and misuse of engineering titles.”
The engineering profession is made up of more than 40 different fields. These include civil, structural, chemical, electrical, telecommunications, agricultural, aeronautical, mining, metallurgical, water, mechanical, energy, medical and manufacturing, among others. It is because of this broad array that bogus practitioners infiltrate the field.
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Zvimba seeks to cancel Rydale title deeds.

ZVIMBA Rural District Council (ZRDC) is planning to cancel title deeds of thousands of properties in Rydale Ridge Park suburb on the outskirts of Harare, claiming that these were obtained using fraudulent documents.
This emerged in a High Court case in which the local authority is suing the Registrar of Deeds and Rydale Ridge Park (Pvt) Limited, a private property development firm that serviced and sold the residential stands, seeking cancellation of the title deeds some of which were issued a decade ago.
Rydale Ridge Park is located near Lake Chivero on the outskirts of Harare, just before Norton.
The title deeds under contention were issued after the local authority’s former chief executive officer (CEO) sanctioned issued clearance to the developer to do so.
The local authority claimed in its urgent court application that its former CEO, who issued the clearance certificates from 2007, had been incompetent, resulting in his failure to detect that the developer had based its application on a forged certificate of compliance.
Justice Felistas Chatukuta, however, dismissed the urgent court application on the basis that it did not meet the requirements of an urgent application, as well as on the basis that people who could be affected the most by this drastic decision had not been enjoined to the application.
The judge refused to accept the ZRDC’s argument that the matter became urgent after its new CEO discovered the anomaly this year, when the authority had been facilitating the issuance of these title deeds for ten years.
In April this year, Rydale Ridge Park (Pvt) Limited applied for rates clearance certificates on behalf of some of its clients who had completed the purchase of their properties. It was at this stage that the new ZRDC CEO refused to issue the certificates, demanding that the firm submits a parallel development permit, a subdivision permit and proof of payment for endowment fees.
This prompted the developer to file an application in the High Court seeking an order compelling the local authority to issue the certificates. The order was granted on August 2, 2017.
On August 4, 2017 the ZRDC filed its own urgent court application to get the court to order the Registrar of Deeds to cancel all the title deeds that it had issued to property owners in Rydale Ridge Park.
“The applicant cannot, by any stretch of imagination successfully contend that the application is urgent when it has been issuing rates clearance certificates to the second respondent for the past 10 years” Justice Chatukuta ruled.
“The parties were in agreement that a rates clearance certificate is a prerequisite for the transfer of property from a seller to a purchaser. In issuing the certificate, a local authority will in essence be authorising transfer of the property. For 10 years the applicant has been authorising transfers to numerous purchasers of stands in the Rydale Ridge Park suburb. Any diligent local authority ought to have inquired as far back as 2007 whether or not the second respondent had a valid certificate of compliance. The lack of diligence of previous chief executive officers cannot not be a basis for suggesting that the need to act only arose when the current chief executive officer took office,” the judge said.
The judge noted that even after purportedly discovering this anomaly in April, the ZRDC had continued issuing the certificates only to file a court application three months later claiming that it was urgent.
“However, it is necessary to observe that it is apparent that the relief sought by the applicant both in the interim and in the finale has far reaching consequences as it affects rights of persons not before the court. Such persons may include innocent third, if not fourth parties who may have purchased the stands from the second respondent’s purchasers. A determination of this application in the absence of those persons would be clearly contrary to rules of natural justice.”
The judge dismissed the application and awarded the costs to the respondents on a higher scale as a sign of the court’s displeasure at the abuse of court processes by the ZRDC and its lawyers.
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The Ministry of Local Government, Public Works and National Housing has announced its intention to demolish old flats in Mbare, Harare.

By Kenneth Matimaire

MUTARE — The Zimbabwe Building Contractors Association (ZBCA) is mobilising a total of $1 billion to embark on massive infrastructural development projections under a build, operate and transfer (BOT) model, The Financial Gazette can report.
The development comes at a time the ZBCA has clinched construction deals under the urban renewal project being spearheaded by the Ministry of Local Government, Public Works and National Housing, which announced its intention to demolish old houses and flats in Sakubva in Mutare, Makokoba in Bulawayo and Mbare in Harare to pave way for high rise modern apartments in the high density suburbs.
Government has already disbursed $2 million of a $30 million budget allocated for Sakubva’s urban renewal, while more funds would be raised for the other cities.
The ZBCA said they had already engaged respective local authorities to work with.
The association said it was also in the process of mobilising $1 billion to kick-start several infrastructural projects under BOT.
A partnership has also been reached between ZBCA and businessman, Nigel Chanakira, who is assisting to mobilise the funds.
“The national urban renewal programme is being spearheaded by the Ministry of Local Government, which is the responsible Ministry. We have taken a key interest in the programme,” said ZBCA president, Ransom Nherera, during a breakfast stakeholders meeting for Manicaland.
“We have actually engaged them and during the talks they have actually given us areas to work with, city councils to work with. So right now we are also mobilising funds to the tune of $1 billion. We have partnered with businessman Nigel Chanakira to assist us with funds mobilisation,” Nherera said.
The ZBCA chief executive officer, Crispen Tsvarai, said they would financially empower and position the association to take up any construction projects.
He said they would embark on BOT projects because BOT had proved to be more efficient.
“It is our own initiative to create work for ourselves. We raise the money ($1 billion), we choose the projects where we can do a built, operate and transfer. We are striving to be part of the (infrastructural development) solutions,” he said.
The ZBCA also wants a slice of the Beitbridge-Harare-Chirundu highway construction.
Government has since allocated 40 percent of the project to indigenous contractors.
However, Nherera said politicians were abusing their power by clandestinely seeking to get tenders under the 40 percent allocated to local contractors.
This, he said, had resulted in some dubious contractors backed by politicians emerging to get tenders ahead of reputable firms.
“We have the mafikizolos that come in…backed by people who know about the work and, unfortunately, it always turns out to be the politicians coming into the space,” Nherera said.
The ZBCA is a non-profit making organisation formed in 1985 with a mandate to represent emergent building contractors in the categories of building constriction and civil engineering, electrical engineering, mechanical engineering and structural steel engineering.
The association seeks to ensure that its members uphold the highest standards of workmanship in the construction business.
It has over 400 members located in its five administrative regions of Harare, Bulawayo, Midlands, Manicaland and Masvingo.
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Zimbabwe Amalgamated Housing Association Killer Zivhu

THE Zimbabwe Amalgamated Housing Association (ZAHA) owned by Association of Rural District Councils president and Zimbabwe Cross Border Traders Association president, Killer Zivhu’s “ZimAsset project” has drawn the ire of Norton residents whose houses were involved without their concern.

ZAHA last week published a supplement in local media highlighting the success of the country’s five-year economic blueprint by showing Norton’s Galloway Park houses.

“The representations therein, done without the knowledge and consent of the beneficiaries , are to the effect that the housing association availed building plans to the beneficiaries and assisted them to develop the stands,” one of the residents said.

“That is not true and in actual fact misrepresentation to say the least. The correct position is that the beneficiaries bought residential stands and developed on their own,” the visibly irate resident added.

People familiar with developments at Galloway told this publication that Zivhu’s media project has sparked unrest and divisions among residents of the affluent suburb who have been fighting in the same corner against ZAHA for unfulfilled obligations.

“The ones with houses used to paint the whole project a success are now viewed by the rest of the residents as dining with the devil and on the side of ZAHA,” the source said.

ZAHA has for the past few months come under fire for failing to provide title deeds to Galloway residents four years after the stands were purchased.

Galloway Residents Association Trust recently told The Financial Gazette that the stands, which measures between 2 500 and 3 000 square meters and were unveiled in 2013, were yet to be fully serviced.

“Four years have lapsed since ZAHA acquired Galloway but nothing of note has transpired. Most if not all Galloway stands have no title survey and they are not listed with the Surveyors General office owing to unpaid surveyor’s fees,” the Trust said.

Information gathered by this publication show that 345 residents bought stands from Norton Brooke between 2011 and 2013 before ZAHA took over the project in 2013.

However, according to documents from Galloway Residents Association Trust, the land developer has failed to avail title deeds to people who had paid up their dues as far back as 2014.

“Numerous approaches to ZAHA by both the trust and individual residents have not yielded any fruits as ZAHA is arrogant and evasive, using the Allied bank case as a scapegoat for non-development yet residents continued subscribing through Ecobank Chitungwiza and CBZ after the closure of Allied Bank on December 6, 2013,” the Trust said, adding that requests made to Norton Town Council to engage ZAHA to comply with requirements of development permit “have not yielded any fruits due to interference’s and unethical motives by both ZAHA and Norton Town Council staff.”

The Trust also blames the Killer Zivhu-led real estate firm for failing to provide standards roads, water reticulation systems and electricity at Galloway’s phase C and D.

“Residents are also struggling to get finance and mortgage as ZAHA has failed to comply with agreed terms of development as detailed in the Parallel Development Permit,” the Trust said.

Zivhu, however, said title deeds for Galloway will only be availed in three years’ time following an agreement made between ZAHA and Norton Town Council.

Eddie Pfugari and his wife

THE High Court has ordered Eddies Pfugari (Pvt) Limited to fully service two sections of its Knowe suburb in Norton within 90 days, failure of which the property development firm should pay nearly $200 million in compensation to residents.
Justice Owen Tagu granted an application by the Knowe Residents and Ratepayers’ Association for an order to force the company to service the residential areas in Phase 2 and Phase 3 of the Knowe housing development in Norton that it has neglected for almost 20 years in breach of contract.
The judge ruled that in the event that the firm failed to do within three months, it should pay $192 901 995,00 to the property owners.
The court found that Eddies Pfugari breached its side of the bargain by failing to construct roads, connect water reticulation, drainage and sanitary systems, erect street lights and construct public facilities or amenities such as schools, clinics and a shopping complex as stipulated in agreements of sale.
The firm, owned by businessman Eddies Pfugari, sold the residential stands between 1998 and 2003 and the buyers were given various payment options ranging between 30 and 60 months and the buyers made all the payments, but the stands remained un-serviced.
Most of the residents built their houses but failed to get title deeds for the properties as the Norton Town Council maintained that it could not issue rates clearance certificates for properties constructed on unserviced land.
This prompted the residents to drag the coampany to court.
Through its lawyers, the company argued that the claim by the residents had prescribed since the payments were made a long time ago and also that the home seekers, who made their payments using the defunct Zimbabwe dollar, could not claim services in United States dollars.
Tagu dismissed the Pfugari’s arguments, saying the claim could not have prescribed because there was no time limit within which the residents could have made the claim. He noted that from the papers filed in court as recently as April 2015, the developer’s lawyers had written to the residents telling them not to complain because there was no time limit for the developments.
“A perusal of the permits granted to the first respondent did not give a time limit within which the first respondent was to carry out the infrastructural development. In my view this too did not give the applicant’s members time limits within which to sue the first respondent,” said the judge.
“It is my further view that whatever was to be done was to be done within a reasonable time. The members having performed their obligations within the stipulated times, it was their legitimate expectation that the first respondent was to also perform its obligations within a reasonable time. The first respondent to date has failed to do so to date. It cannot therefore hide behind the issue of prescription to avoid its obligations.”
Tagu also dismissed the argument that inflation had rendered it impossible for the developer to make the infrastructural developments. He accused Eddies Pfugari of trying to unjustly enrich itself by raising “supervening impossibility” as its defence, saying most of the money was paid to it almost a decade before inflation wiped off the value of the local currency.
“In my view any suggestion to that effect constitutes an attempt by the first respondent to eschew obligations that it voluntarily assumed and to unjustly enrich itself at the expense of the members of the applicant. With due respect, the first respondent has failed to discharge the onus of establishing that performance is now impossible in the error of dollarisation.
“For a contract that was entered into in 1998, there is no explanation whatsoever as to why between 1998 and 2009 when dollarisation occurred, the first respondent failed to service the stands. This is a simple case of a litigant who failed to fulfil its contractual obligations for many years, having squandered the millions of the purchase price and now seek to suggest that inflation prevented it from doing the right thing. This is not the sort of scenario that the defence of impossibility of performance was designed for. Any hardships that arose now is self-created and must not be accommodated by this honourable court.”
The court ordered the company to service the stands to the satisfaction of the Norton Town Council, failure of which it would be required to pay the money in compensation. In the event that Eddies Pfugari fails to do both, the court authorises the Sheriff to attach and sell its assets.
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PROPERTY development firm, Aspindale Park, has secured title deeds from the Harare City Council for its multi-purpose housing project situated at the junction of High Glen road and Kambuzuma, a development that will result in home-seekers being able to access mortgage finance.
The project comprises 1 200 residential stands measuring between 200 square meters and 350 square meters as well as other mixed land uses aimed at supporting the residents.
Aspindale Park, whose first phase comprising 392 housing stands was completed in August, is offering world class living and working standards and services for both its residential and commercial clients.
“The issuance of title deeds means new customers can now apply for mortgage finance from any bank in the country,” Aspindale Park project manager Michael Swan said.
He added that his company, which has embarked on the second phase of the project, is receiving numerous inquiries from corporates and individuals concerning the new 380 stands scheduled for the second phase.
“We are now working on completing the second phase of the project by year end.
“The first phase generated a lot of interest in people and many companies and individuals are enquiring about the next project as they look for housing solutions,” Swan said.
Residential stands are selling at $85 per square metre inclusive of value added tax. A deposit of 30 percent is required and the payment plans range between one year and five years.
Payment plans for mortgages range from 10 to 25 years. Some banks that offer mortgage finance in Zimbabwe include CABS, Stanbic, FBC Building Society, ZB Bank, POSB and NMB among others.
Aspindale will also develop two schools, three churches, a clinic, retail space, two fuel filling stations and small-to-medium enterprises at the 56 hectare land that is secured through a property boundary — providing a safe haven for families to flourish in.
The commercial aspect will include establishment of a SMEs and industrial development commercial hub within Aspindale Park as it seeks to promote economic growth.
Development of the commercial hub commenced early this year alongside the development of the residential stands, initially with SMES in the supply of building materials.
Other retail services shall be incorporated at a later stage of development and these amenities will create massive scope for employment and economic development as well as investment opportunities.
SMEs are contributing significantly to the growth of the economy, contributing 70 percent of Zimbabwe’s gross domestic product as highlighted in the national budget.

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Zera chief executive officer Engineer Gloria Magombo

ZIMBABWE has seized and destroyed over 150 000 incandescent light bulbs following a ban on conventional light bulbs under Statutory Instrument (SI) 21 of 2017, the Zimbabwe Energy Regulatory Authority (ZERA) has said.
ZERA chief executive officer, Gloria Magombo, last week told The Financial Gazette that the majority of the bulbs — about 100 000 —were seized by the Zimbabwe Revenue Authority (Zimra) from an illegal consignment.
“In September, 65 retail points were inspected and six non-compliant shops selling incandescent bulbs were found. A total of 551 bulbs with a capacity of 51,6 kilowatts (kW) were seized. These seized products are estimated to result in savings of more than 151 Megawatts (MWh) per year with the cost of importing such power in excess of $21 593 per year.
“In October 2017, 47 retail points have so far been inspected with 12 non-compliant shops selling incandescent bulbs with 10 partly compliant shops (selling incandescent, CFL and LED bulbs). Fully compliant shops recorded stand at 25,” she said.
“A total number of 780 bulbs with a capacity of 66,9kW were seized. The seized products are estimated to result in savings of more than 195MWh per year. The cost of importing such power is in excess of $28 000 per year,” Magombo said.
According to a ZERA public notice, any person found with the bulbs after April 28, 2017 shall be guilty of an offence and liable to a fine or face a six-month jail term.
The banned products are incandescent light bulbs with the exception of special incandescent lighting products such as medical and laboratory equipment, T10 AND T12 halo phosphate florescent lamps and magnet ballasts as well as florescent lamps with a colour rendering index less than 80.
At the end of June 2017, ZERA had seized over 6 000 bulbs after the law became effective on April 28, 2017, with ZIMRA seizing and destroying a consignment of over 100 000 bulbs.
Magombo said while most of the country’s major retailers had complied, the blitz had mostly affected informal traders who had taken longer to comply.
The regulator is set to roll out a new phase under the law aimed at ensuring local retailers complied with minimum energy performing standards, with the next phase looking at trying to ensure that the available product complies with the law.
ZERA domestic and industrial users are now required to use energy-saving alternatives such as CFLs and LED bulbs.
Energy specialists said the ban would save the country from substantial power consumption, much of which is being met through imports.
The energy savers are 80 percent efficient and last 10 times longer than ordinary filament bulbs as they have 10 000 burning hours.
They also provide the same brightness with six times less wattage and last five more years when being used by consumers.
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The report said that the demand for retail space remained high although there were increasing vacancies in the central business district.

ZIMBABWE’S protracted economic problems have resulted in depressed demand for properties in all sectors, resulting in the country having the lowest rentals in sub-Saharan Africa, a report by international property firm, Knight Frank, has indicated.
In its 2017 Africa Report, Knight Frank said Zimbabwe’s prime property rentals ranked among the lowest in Africa because of suppressed demand, resulting from the economic difficulties that the country has been going through for nearly two decades.
Knight Frank has real estate consultants in more than 350 offices worldwide.
The report said Zimbabwe’s most expensive residential properties — at rentals averaging $2 000 per month — were only higher than those of Botswana, which average $1 900. All other rentals — office, retail and industrial — were lower than most regional averages.
The report profiled more than 30 countries covered by its research.
Whereas Zimbabwe’s up-market residential rentals averaged $2 000, they were nowhere comparable to the
$15 000 charged in Luanda (Angola), the $10 000 in Kinshasa (Democratic Republic of Congo), the $5 500 in Maputo (Mozambique), the $4 500 in Johannesburg and $5000 in Cape Town (South Africa) and the $3 500 charged in Lusaka (Zambia). In Windhoek (Namibia), the residential prime rents averaged $2 900, $4 500 in Dar es Salaam (Tanzania), $5 000 in Kampala (Uganda) and $4 100 in Nairobi (Kenya).
In Harare, prime office rentals averaged $10 per square metre, compared to Angola’s $80, Mozambique’s $27,50, DRC’s $25, South Africa’s $18, Zambia’s $20 and $11,50 in Gaborone (Botswana).
At $25 per square metre, Zimbabwe’s retail space is cheaper than the $80 in Angola, $60 in South Africa, $48 in Kenya, $40 in Zambia and $28 in Mozambique.
As for the industrial rents, Zimbabwe’s $3 per square metre is cheaper than the $15 charged in the DRC, $10 in Angola, $6 in Zambia, $5,50 in Mozambique and $5 charged in South Africa.
The report noted that lack of mortgage finance to assist home seekers had slowed down up market housing developments in Zimbabwe.
“Low disposable incomes and poor liquidity have depressed rental levels and reduced property prices. Therefore, no major speculative housing developments have been built in recent times, and the few attempts to construct such projects have failed. The available new stock has mainly come from self-built projects and housing cooperatives.”
On the office segment of the property market, Knight Frank pointed at the high vacancies as the reason for the depressed rentals.
“Zimbabwe is suffering from economic and liquidity challenges which have stagnated office market activity. Supply is higher than demand and tenants are voluntarily surrendering space. Office buildings in the Harare CBD have void rates in excess of 50 percent, making them unattractive investments.
“Suburban offices have become more sought-after investments, due to their lower void rates, but there continues to be few sales transactions. To reduce vacancy levels, some CBD landlords are converting office space to shops, while others are partitioning floors into smaller suites.”
The report said that the demand for retail space remained high although there were increasing vacancies in the central business district.
“Empty units in the CBD have become visible and vacant space is taking long to lease. Retailers face stiff competition from street vendors who sell their goods on shop pavements. The construction of new suburban shopping malls such as the Mall of Zimbabwe and the Gunhill Mall has been shelved in light of the country’s poor economic outlook.
“Nonetheless, demand for prime suburban retail space remains buoyant and there are high occupancy rates in this sector. Prime rents are currently higher for suburban retail space, at US$25/sq m/month, compared with US$20/sq m/ month in the CBD.
In the industrial segment of the market, it concluded that the continued decline of the economy had led to several manufacturing companies closing operations leading to high vacancies.
“Very little foreign direct investment has come into the country as a result of the government’s indigenisation policies, the high cost of capital and socio-political instability. This has led to an oversupply and under-utilisation of industrial space. The sector is therefore characterised by high vacancy rates, declining rents and the voluntary surrender of leased space by tenants.
“A number of investors in this sector are looking to disinvest, but there is little or no demand except from a few owner-occupiers.”
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The flats, along Willowvale Road in Highfield, were built under government’s US$25 million revolving fund and were commissioned in 2011 by President Robert Mugabe.

GOVERNMENT has decided to rent out State-built apartments in Willowvale that have since 2012 been embroiled in controversy.
The flats have been mired in controversy for the past five years, after government’s attempt to sell the flats to individuals raised a stink, following corruption allegations.
Beneficiaries of the two-bedroomed flats were mostly supposed to have been drawn from the civil service and general public, with the civil servants paying $3 600 deposit for over 25 years while the general public were asked to pay $10 000 deposit and pay off the balance over 15 years.
For the civil servants, the flats would cost $36 760, while members of the public would pay
$40 000. It is, however, not clear how many of the 240 flats have been purchased so far since 2011.
In 2012, the State threatened to cancel some agreement of sale contracts that were alleged to have been corruptly obtained by certain individuals.
At the time, government also discovered that some of the beneficiaries were as young as eight years.
The flats, along Willowvale Road in Highfield, were built under government’s US$25 million revolving fund and were commissioned in 2011 by President Robert Mugabe.
Targeted for people without accommodation, the flats were hardly occupied by people of Harare’s housing waiting list. They were instead mostly grabbed by government officials and well-connected individuals.
Despite major residential developments across the country Zimbabwe’s housing backlog since independence been rising and currently stands at 1,25 million with government now pushing for creation of more high rise apartments to ease the housing backlog.

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What remains of houses in Budiriro 4 after they were demolished by the Harare City Council.

THE High Court has ruled that it is unjust for the Harare City Council (HCC) to raze down illegal structures in the capital because its own inaction when these structures were erected over the years makes it complicit in the violation of building by-laws.
The ruling was made when the High Court recently confirmed its 2015 decision to bar HCC from razing down houses belonging to the 177-strong member Rudo Housing Co-operative in Harare’s Budiriro suburb.
Justice Francis Bere ruled that apart from the fact that it is unconstitutional to evict people or raze down their dwellings without a lawful court order, it was against the laws of natural justice for the local authority to evict the residents after wilfully neglecting its duty of enforcing its own by-laws.
“Accepted, the applicants may not have followed the spirit and letter of the relevant laws governing the construction of their dwelling houses in issue, but the complicity of the respondent (HCC) in allowing such construction to take place for several years suggests that it must have waived full compliance with its own regulations,” Bere pointed out.
“We are not talking of a single structure, not even 10 structures, but several structures in a built-up area within the jurisdiction of the respondent. The respondent, by its conduct must be taken to have consented to the construction by the applicants.”
After HCC gave the 177 beneficiaries of the housing co-operative 48 hours to leave their homes to pave way for the demolition of the houses which it said were in violation Urban Council Act, the residents rushed to the courts to stop the evictions and demolitions.
The court granted them relief and the case remained pending until a fortnight ago when the final ruling was released.
It was the resident’s contention that their eviction without being heard was a violation of their right to administrative justice under Section 68 of the Constitution.
They further argued that their rights to equal protection and benefit of the law were also being violated under the circumstances.
The co-operators pointed out that HCC gave them the land and even drafted a site plan for the residential area and construction started only to be served with the eviction notice two years later.
“Having allocated that land, first respondent’s Department of Planning proceeded to create a site plan demarcating the space into several residential stands of above 200 square metres each,” the residents’ lawyers said in the court papers.
“Using the said plan, the applicant (cooperative) allocated the residential stands to its members as the first respondent had made it to believe that everything was on course.”
The court ruled that the local authority has no powers to effect any eviction and or demolitions without a valid court order.
“I am more than satisfied that the demolition of the various dwelling structures without an order of court would amount to a serious violation of the applicant’s rights,” the judge ruled.
“I am far from being convinced that the Statutory Instrument 109/1979 as well as other allied provisions of the Urban Councils Act referred to me by the respondent’s counsel must cumulatively be read to override section 74 of the Constitution of the Republic of Zimbabwe which was specifically crafted to avoid arbitrary evictions like what is being threatened to be done in this case.”
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Cresta Hospitality CEO, Glenn Stutchbury

CRESTA Hotels continues to undertake upgrading and renovation work at its various hotels in southern Africa, including Zimbabwe, recently completing project work at Cresta Churchill in Bulawayo and announcing project work for 2018 at Cresta Oasis and Apartments in Harare.
When it comes to hospitality in Zimbabwe, there are few operators with the experience and track record of Cresta Hotels.
The group runs five hotels across the country, and in the past five years, has undertaken a development and expansion programme to enable it not only continue as a major player in the travel and tourism sector, but also to enhance and increase the scope of that role.
Cresta CEO Glenn Stutchbury believes the future potential of the travel and tourism sector in Zimbabwe is enormous and, given recent events, could soon be realised.
“One of the benefits of the recent massive level of international publicity for Zimbabwe is that more people recognise and know the country than before, and if we can harness this understanding to promote travel here, then we will have done ourselves a major service, over and above the obvious positive outflows from the situation,” he said.
Cresta is well placed to take advantage of increases in arrivals, whether for business or leisure purposes. In Harare it operates the leading hotel in the three-and four-star market, Cresta Lodge, with two city centre hotels aimed primarily at business guests and the conference market: Cresta Oasis and Apartments and Cresta Jameson.
In Bulawayo, it runs the Cresta Churchill, a suburban hotel with a longstanding reputation for fine hospitality, while in Victoria Falls it operates Cresta Sprayview, aimed mainly at leisure travellers from all source markets, local, regional and international, but also at the local market for conference activity.
“We have positioned our group’s hotels to be in key locations and these complement the 11 hotels we also run in Botswana and one hotel in Lusaka, Zambia,” said Stutchbury.
Developments during the past five years have been focused on upgrading all the hotels and expanding the level of offerings, as well as ensuring that service standards move to world-class levels to satisfy the needs of widely-travelled visitors who experience such standards at other destinations to which they travel.
Cresta Lodge will in early 2018 celebrate its 25th anniversary and is well established as Harare’s leading suburban hotel.
Between 2012 and 2016 a $6-million investment programme saw the complete refurbishment of the hotel, including all 171 suites and bedrooms, all public areas and Chatters restaurant, as well as the conversion of the lounge area into the upmarket Cool Beans coffee shop.
The programme also saw the construction of the Cresta Sango conference and banqueting centre, now one of the busiest in Harare.
Cresta Oasis and Apartments, which underwent various refurbishments over recent years, will in early 2018 completely renovate bedrooms and suites.
Within the hotel, the leisure club that has for many years been leased out to franchise-holders will be taken back under the hotel’s own wing and will be run as an upmarket entertainment venue.
Cresta Jameson, celebrating its 60th anniversary during 2018, has focused on a role as a venue for conferences and banqueting events, as well as accommodating budget travellers.
After experimenting with several models of operation it has re-established its Tiffany’s restaurant and revamped the style of cuisine and service, introducing the ChimbiChimbi menu in its ground floor dining venue, the Sandawana.
Cresta Churchill has completed a seven-month,
$4700 000 refurbishment programme and enters 2018 with all suites and bedrooms refurbished and bathrooms completely renovated.
The hotel regains its position as the leading hotel in the city of kings, Bulawayo, and looks set to increase levels of support from all sections of the market.
Victoria Falls’ Cresta Sprayview was opened in 2013, after Cresta Hotels entered into an agreement with property owners to convert the hotel into an entity aimed at international and local travelers in the three-star market.
It also hosts conference facilities mainly focused on small to medium-size gatherings from within Zimbabwe and the region.
“We have something for everyone and our focus has been to maximise quality of infrastructure, service and other offerings while at the same time offering the most competitive of rates in the markets we serve,” said Stutchbury.
“As we move into 2018 and a hoped-for increase in visitor arrivals, as well as a re-invigoration of domestic travel, we are well positioned to take advantage of all opportunities that come our way.
“We are also active across the world in creating business for Zimbabwe and for ourselves, and we are delighted with all developments that have increased and will increase visibility for Zimbabwe as a major travel and tourism destination.”­

President Emmerson Mnangagwa

SOUTH Africa’s largest cement and lime manufacturer, PPC, is eyeing more investments in Zimbabwe following the political transition in the country.
President Emmerson Mnangagwa took power through a military takeover and popular protests that ousted long time ruler Robert Mugabe last month.
Many are expecting the 75-year-old leader to implement policies that will halt the country’s economic decline and inject fresh impetus into the ailing manufacturing industry, agriculture and mining sectors.
PPC chief financial officer Tryphosa Ramano said despite the current situation, there are substantial opportunities, thanks to Mnangagwa’s broad vision for restoring economic and financial stability.
“This is the most opportune time for the South African business people to invest in Zimbabwe. One does not have to wait for this giant to wake up completely, as it may be difficult to find opportunities when the economy has completely recovered,” he said.
PPC, which has invested more than $120 million in different projects in Zimbabwe since 2009, is looking forward to do more in the near future.
“With the latest political events providing a promise of things to come, PPC is looking to the future of Zimbabwe, to develop infrastructure and help boost the growth of other economic sectors,” he said.
“On their part, President Mnangagwa and his team should lay out attractive measures to lure foreign investment into the country. Improvements in the people’s living conditions would restore Zimbabwe’s economic health, energise investment and build a solid foundation for efficiency and competitiveness,” Ramano added.
The cement manufacturer recently reported a 36 percent rise in first-half earnings, supported by a strong performance in Zimbabwe and Rwanda.
Group revenue edged up one percent to R5,188 billion from R156 million in the comparable period a year ago, while Earnings before interest, tax, depreciation and amortization (EBITDA) advanced four percent to R1,2 billion.
Volumes sold increased two percent to around three metric tonnes, while net profit attributable to PPC shareholders increased 188 percent to R294 million.
While profits slumped in the domestic market, there was an improved return in other African markets. In addition, PPC increased its cement capacity by 33 percent in the year ending March 31, 2017 following the commissioning of its Zimbabwe mill and projects in the Democratic Republic of Congo (DRC) and Ethiopia.
Revenue in southern Africa cement, which includes Botswana, slipped but realised higher selling prices of two percent.
PPC increased prices in February and August 2017. Volumes fell by 25 percent in this segment, but with two less trading days.
The lower volumes inland were offset by marginal growth along the coast. Imports remain at similar levels to half year last year. EBITDA was stable at around 25,6 percent.
In Rwanda and Zimbabwe volume growth supported a revenue increase of nine percent at a time when selling prices have been stable. EBITDA expanded by a robust 25 percent to R422 million, with EBITDA margins expanding from 30 to 34 percent.
Rwanda continued to deliver healthy volume growth, with plants running at a capacity utilisation rate of over 65 percent and sales expanding by more than 30 percent year on year.
The company also benefitted from improved market penetration as it launched its bulk solution in August 2017 to service the construction and construction product markets resulting in improved market penetration.
PPC Zimbabwe grew volumes by more than 25 percent compared to last year, achieving new sales records in the process. In the north of the country, the volume growth was backed by the commissioning of the Harare mill, while average sale prices rose four percent in United States dollar terms year on year.
The company, which has effectively rejected a conditional partial offer from domestic rival AfriSam Group and Canada’s Fairfax Group for the company ― stating that it undervalued the company, said demand is being driven by housing and asset investments.
The cement producer completed its new plants in the DRC and Ethiopia and the works are in the process of being tested and commissioned by the end of the current financial year. During the period limited production was sold into the market.

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Solutions to revive the property sector also lie in a sustainable, practical and coordinated approach from all stakeholders in the real estate supply chain, starting with the basics.

THE resuscitation of the property market can be achieved through sector specific solutions which respond to market needs, the Real Estate Institute of Zimbabwe (REIZ) has said.
Speaking to The Financial Gazette, REIZ president Mike Juru said property sector players, who are able to adapt and provide properties that can service the needs of the market, were expected to yield better results going forward.
He said the commercial office sector, which was currently experiencing low demand for rental space ― increasing voids and tenant defaults in the process, was exerting downward or stagnant pressure on new investments in Real Estate.
The unstable economic environment was also negatively affecting the sector’s performance.
“Proceeding with the traditional thinking will only enhance chances of business closure. As such, the need for new thinking in a new economy is a must, especially with the new players in the market that are discerning and clear of their requirements. The resuscitation of the property market can be achieved through sector specific solutions,” he said.
Juru said solutions to revive the sector also lie in a sustainable, practical and coordinated approach from all stakeholders in the real estate supply chain, starting with the basics.
“There is need for the town planning regulations (local development plans) to be revisited to reflect the current demands. The mixed-use concept should be reconfigured and applied on a respective stand wherein a property can be used for retail, offices or residential at the same time. The central business district should not strictly be only commercial and offices; and further, the operating hours should not be confined to 8am to 5pm and leave the city to sleep,” he said.
It is generally accepted that there are three major forms of investment, namely ― money, stock market and property market, which Juru says is not formally regulated.
“The lack of a formal regulated vehicle that can be used to drive property development means as a nation, we cannot unlock value and attract international capital to develop properties and at the same time, locally, the investors or beneficiaries of property investment are not protected and do not have tax benefits,” said Juru.
He said in other economies where real estate was booming the sector had regulated mechanisms available for property investors through real estate investment trusts which provide for tax breaks and formally regulated property investment structures.
“There is need for Zimbabwe to create such to allow funds to go into property development in a coordinated and regulated manner,” he said.
Zimbabwe’s model building by-laws, which stipulate the minimum expectations for construction in Zimbabwe, were last revised in 1975 and with technological advancement, modern technologies and innovation, the sector specifications have been overtaken by events and were making construction expensive and discouraging investors and making investment into property not viable.
“Steel-framed and prefabricated structures are not permissible, yet it is a faster and cheaper way of construction. There is urgent need to revise our model building by-laws to move with global trends and thereby reduce costs and delays in construction,” he said.
The property market fundamentals have largely remained depressed during the year due to the tough macro-economic climate and at the same time the operating environment has remained difficult due to low demand and low capacity.
This has, in the main, contributed to the nature of activities taking place in the sector.
The property market has been a mixed bag of fortunes with residential developments taking centre stage largely being demand driven and riding on the back of an estimated 1,2 million national housing backlog.
“On taking a look at all towns and cities around the country, significant housing developments are taking place, however, in a majority of cases on land that is partially serviced.
“Without completely serviced land, no title deeds can be issued by the Registrar of Deeds,” Juru said adding that the developments taking place were inadequately funded because no banks lend where there were no title deeds. The lack of finance resulted in poor quality of housing on the market.
The bulk of activities in the residential sector were concentrated on the lower end of the market which is high density and all this to some extent points to a new economy emerging in the low to middle class supported by the informal sector.
Despite the majority of banks offering mortgage finance, the low income levels were ultimately affecting uptake. The prevailing low income levels, compounded by high interest rates and high property values have resulted in limited capacity for the majority to
afford houses resulting in the high demand properties for rent.

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Transport and Infrastructure Development Minister, Joram Gumbo.

THE Harare-Bulawayo highway dualisation project has resumed after it ended at Norton four years ago, The Financial Gazette can report.
The dualisation is part of a project linking Plumtree and Mutare.
The tender was awarded to Infralink, a joint venture between the Zimbabwe National Road Administration and Group Five International of South Africa.
The company undertook part of the project up to Norton and dualised the Mutare-Harare highway up to Goromonzi. The Harare-Mutare and Norton to Plumtree stretches of the road were resurfaced.
The dualisation of the Harare-Bulawayo, which was conceived 21 years ago, was probably one of the world’s slowest highway projects, moving at a snail’s pace of 1,9 kilometres per year. It has so far progressed 40km from Harare to Norton. It took government 16 years to complete 30km of the highway after it stalled several times due to funding challenges.
Transport and Infrastructure Development Minister, Joram Gumbo (pictured), declined to comment on the latest development, only saying: “I have just started work. That project is not new; it’s an old project.”
The project is part of a US$206 million Plumtree-Bulawayo-Harare-Mutare project.
ZINARA and Group Five had 70 and 30 percent shareholding respectively in Infralink.
Funded by the Development Bank of Southern Africa, the highway rehabilitation was completed in 2015.
Zimbabwe has had challenges rehabilitating about
100 000km of its road network that has largely been left neglected over the past 37 years.
The country is currently struggling to dualise its busiest highway and one of southern Africa’ major arteries, the Beitbridge-Harare-Chirundu Highway.
Despite a US$1 billion contract to dualise the Harare-Beitbridge section of the road having been awarded to Austrian firm Geiger International early this year, real progress still has to be seen.
The 930km highway dualisation, expected to last three years at a total US$3 billion, has been on the cards since 2002 when it was estimated to cost just over US$900 million back then.
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“As inflation and interest rates increase, the funds available to consumers for bonds decrease and it becomes difficult to qualify for home loans,” says Stevens.

WHAT are the main issues that affect property prices in South Africa?

“The answer is more complex than it would seem at face value,” says Paul Stevens, CEO of Just Property. “There are various factors at play, the most important being market conditions which affect so many elements, including the cost of loans.”

“The repurchase rate, or repo rate, is the interest rate that the South African Reserve Bank applies to the money it lends to banks. The Reserve Bank uses the repo rate to target inflation – as inflation rises, so does the interest rate. This affects the prime lending rate that the banks set, which is applied to bonds,” explains Stevens.

“As inflation and interest rates increase, the funds available to consumers for bonds decrease and it becomes difficult to qualify for home loans. This in turn affects demand and where demand decreases, house prices will follow, which results in what we call a ‘buyers’ market’.”

While the interest rates may be an obvious contributing factor, Stevens points to the profile of the buyers in an area as less obvious, but just as significant, in determining demand, and therefore the value of your property.

“In some provinces, the highest growth in home buyers is centred on the young – these purchasers would be looking for properties that are markedly different from those prized by middle-aged and older buyers. While the home that a young buyer is seeking might be similar in size to the footprint a retiree wants, the areas they prefer would be very different,” says Stevens.

Look at the November Overview of the Current Property Landscape by Lightstone property data analysts. The age of the largest groups of buyers in Gauteng are from 18 to 25 and 25 to 35, while the Western Cape shows its biggest growth for property buyers in the ranges of 55 to 65, and those older than 65.

Stevens explains that while the demand from first-time buyers for smaller homes in Johannesburg might be driven by ‘live-work-play’ considerations, proximity to transport nodes and access to business hubs, these would be of lesser importance to the retired small-home purchaser in Cape Town. And while a 30-year-old with a family is looking to be close to the best schools, a 55-year-old is starting to prioritise other factors as their children finish school.

“Remember the old property adage ‘location, location, location’, but also factor in which segment forms the largest group of buyers in your area – that is where the greatest demand for certain locations will come from, and from that you can ascertain what it is about your area that is attracting them,” says Stevens.

“If your home ticks the requirements of more than one group of purchasers, you’re going to be able to ask a higher price than the same home in a less desirable area.”

Other factors that affect house prices include the condition of the property.

“If you spend any money before you sell your house, focus on the kitchen and bathrooms,” Stevens advises. “Even if they plan to do some renovations, most of our clients are looking for a property they can move into – fixer-uppers attract a lower price because of the capital outlay still required to make the home liveable. Similarly, flow has become so much more important – if your home doesn’t have good flow, buyers will be factoring in the cost of improving it.”

Then there are issues to consider like seasonal demand. This can be more complicated than one would expect. Stevens points out that while sellers may think that winter would be a time when buyers are in hibernation, many actively look during the cold and gloomy months so they can see prospective homes under the “worst” conditions.

“There’s a lot to consider when it comes to valuing your home. It’s hard for sellers to divorce themselves from the emotion of it, after all it is where you’ve lived your life and made your most defining memories. This is why the relationship and trust you have in your agent is so important. They should belong to a real estate group that focuses on keeping their agents fully informed about prevailing market conditions,” says Stevens.

“Above all else, make sure the agent you choose is entrenched in and committed to your area. They need to be passionate about its attractions and totally conversant with who is looking and what they’re looking for.”

If an agent ticks all those boxes, Stevens has still one more imperative.

“Choose a real estate professional with the same values that you prize: honesty, integrity, optimism, excellence and innovation. You will be able to trust them to value and market your home, and eventually achieve the best price for you under the current conditions,” says Stevens. –property24.com

If investors are willing to take a long-term approach to their investment, the possible returns far outstrip those that would be achievable investing elsewhere.

THE recent disaster that befell the Steinhoff share price is a prime example of the risks of investing your hard-earned money in shares. Imagine the horror of waking up to discover your investment is worth less than half of what it was the day before. 

While Steinhoff shares were, until recently, considered one of the best shares to invest in, they recently fell as low as R11, a loss of over 65%, and are still highly unstable. This effectively reduced the value of the stock by more than R117 billion within the space of 24 hours.

And IGrow Wealth Investments CEO and founder, Jacques Fouché, says this case is not unique – while shares can prove a lucrative investment, equally they can cost investors their entire life savings. Wal-Mart, Exxon Mobil and Qualcomm all lost massive value in 2015. When a company goes down, they take your savings with them. History tends to repeat itself and shares are subject to volatilities that can cause devastating losses.

That is one of the main reasons IGrow Wealth Investments chooses property as its underlying asset class.

Fouché says real estate not only provides tangible assets in which to invest, but the nature of property means that, if investors are willing to take a long-term approach to their investment, the possible returns far outstrip those that would be achievable investing elsewhere.

Given the steady growth of the middle class that South Africa is experiencing, which is driving the growing demand for housing, Fouché says property is proving to be a solid investment strategy. “This is an investment that is less susceptible to volatilities influencing other investments as the demand for housing remains high. This helps investors to safeguard their retirement savings”.

“And because property investors own a tangible asset directly, an asset which is registered at the deeds office, they are protected legally and have control over their investment, rather than putting their retirement savings in the hands of others, as they effectively do when investing in shares. Property, unlike other forms of investment, is not influenced by sentiment.”

Fouché says property in the buy-to-let market provides not only a steady, growing rental income, but also the capital growth of the underlying asset value, especially in the areas of diminishing land available for development.

The government is falling behind in its promises to provide housing, and so it also acknowledges investment real estate as an answer to this crisis. Therefore, SARS is willing to provide tax incentives to investors who help to meet this housing need in the form of tax breaks for qualifying investors. “So not only can you benefit further from investing in property, but you can rest assured in the knowledge that you’re helping to do your part to meet the housing needs of the country.”

 Whichever way you look at it, Fouché says real estate as an investment makes sense. So, the next time you’re looking to invest your savings, consider the benefits of a property portfolio. –property24.com