Property market remains resilient

Nelson Gahadza [email protected]

Zimbabwe’s property market remained resilient in the first half of the year, despite persistent affordability constraints, high construction costs and limited access to long-term funding, with demand increasingly shifting towards well-located, affordable and flexible properties, according to Mashonaland Holdings.

The listed property group said the market continued to show differing performance across locations and asset classes during the six months to June 30, with convenience retail and neighbourhood commercial developments benefiting from changing consumer patterns and the decentralisation of economic activity.

Chairperson Engineer Grace Bhema said the group was responding to changing market dynamics by concentrating on improving occupancy, retaining quality tenants and advancing developments where there was clear evidence of demand.

“Tenant and investor demand is increasingly concentrated in well-located properties that offer affordability, accessibility, reliable utilities and flexible space.

“The resilience of the market demonstrates that there are opportunities for property owners who remain responsive to changing tenant requirements and disciplined in the deployment of capital,” she said.

The office segment, however, remained competitive, with businesses showing a preference for smaller, efficient and appropriately priced space, while residential demand remained positive, particularly for serviced stands and cluster housing.

The group said affordability constraints and limited mortgage financing continued to weigh on the pace of residential transactions, while development activity remained constrained by high construction costs, infrastructure requirements and limited access to affordable long-term funding.

“These conditions favour phased, demand-led developments and the refurbishment or repositioning of existing properties where commercially viable,” said Eng Bhema.

Against this backdrop, Mashonaland Holdings recorded a 7 percent increase in revenue to US$3,91 million for the half year, up from US$3,66 million in the prior comparative period.

The growth was supported by additional tenant onboarding and an increase in property-services income, with new lettings at Pomona Commercial Centre contributing to the improvement.

Pomona closed the period at 75 percent occupancy, and the group expects the development to reach full occupancy before year-end.

Operating profit increased 27 percent to US$1,93 million, driven by higher net property income and disciplined cost management, while profit after tax surged 146 percent to US$1,80 million.

Rental collections remained satisfactory at 93,9 percent, while initiatives to improve leasing helped lift overall portfolio occupancy to 89 percent in June, up from 88 percent in the previous period.

The group’s investment property portfolio also strengthened, rising to US$96,4 million from US$94,7 million at the end of December 2025.

Mashonaland Holdings attributed the increase to capital improvements undertaken during the period and fair-value gains arising from the mid-year valuation.

Eng Bhema said the group remained focused on protecting the quality of its property portfolio while selectively investing in projects capable of generating sustainable long-term value.

“We remain focused on preserving the quality of our portfolio while selectively investing in projects that enhance long-term shareholder value,” she said.

Beyond its existing portfolio, the group continued to advance its development pipeline.

At 126 Coronation Drive in Greendale, civil works for a proposed 30-unit residential cluster development were 95 percent complete by the end of June, with the project also progressing through the statutory approval process.

The Shurugwi residential stands project also recorded progress, with surveying completed and engineering work having commenced.

Servicing and phased pre-sales are expected to begin in the second half of the year.

Going forward, Eng Bhema said priorities would include improving tenant satisfaction and retention, increasing occupancy, and strengthening property management and leasing initiatives.

The group said the planned commencement of pre-sales for its development projects would provide an important step towards commercialising its pipeline.

“While market risks and funding constraints remain, we are positive about the opportunities ahead,” said Eng Bhema.

“We will continue to take a disciplined approach to tenant experience, occupancy and project sales to create sustainable shareholder value.”