Zimbabwe’s economic outlook for 2025 suggests a potential recovery with GDP growth projected to reach around 6%, contingent on a rebound in agriculture, growth in the mining sector, and continued development of the tourism sector.

According to Knight Frank Africa, Zimbabwe’s property market is expected to experience growth, driven by increased demand for housing and commercial space. However, realising this potential requires the country to address key challenges including infrastructure constraints and regulatory challenges related to property rights, zoning, and town planning. The dominance of financial institutions in the property market present both opportunity and challenges for traditional developers.

Zimbabwe’s office market

Office vacancy rates in Harare and Bulawayo’s CBDs have reached 60% and 40% respectively with this significant level attributed to several factors including aging and poorly maintained infrastructure, a reported 13% increase in crime within the CBDs between H2 2023 and H2 2024, and limited expensive parking options with the average casual parking cost in the CBD reaching US$1.00 per hour.

According to Knight Frank’s data, 30% of businesses previously located in Bulawayo’s CBD relocated to suburban areas such as Suburbs and Khumalo between H2 2020 and H2 2024. In Harare, a similar trend has been observed with all major banks having relocated, planning to, or are in the process of building their head offices in the northern suburbs such as Highlands, Newlands, and Borrowdale.

Tenants are also leaving the CBDs because of traffic congestion and high rental rates. For instance, traffic congestion within the Harare CBD has increased by 30% in recent years. The average rental rate in the CBDs is currently US$6.00 per square metre compared to US$10.00 per square metre in the suburban locations and while parking is typically charged at US$1.00 per hour in the CBD, free customer parking is widely available in suburban office parks.

Zimbabwe’s retail sector

Large retail boxes remain in the form of supermarkets with hardware stores and department stores having closed and converted into micro shops. The division of large retail spaces into smaller units targets small-to-medium business enterprises (SMEs), reflects Zimbabwe’s retail sector’s rapid shift towards informal and decentralised operations. In November 2024, Choppies Supermarkets, a Botswana-based grocery retailer, announced its planned disinvestment from the Zimbabwean market, following the depreciation of the local currency, shortage of foreign currency, and a decline in disposable incomes. The company operated 32 stores across Zimbabwe prior to the announcement.

Zimbabwe’s retail leases are structured on a basic rent and turnover rent basis with an average 2%. National retailers in Zimbabwe typically receive revenue in a mix of Zimbabwean dollars (ZWG) and US dollars, with a current estimated ratio of 90:10 ZWG to USD. This high reliance on the ZWG exposes retailers to significant exchange rate risk and macroeconomic instability.

Rental rates for these SME units vary depending on location. In other towns, monthly rates are typically between US$20 and US$30 per square metre, while in Harare’s CBD, rates can reach as high as US$50 per square metre. These higher rates in the CBD are associated with a high tenant turnover rate of approximately 40% annually, indicating a competitive market with short-term leases. They are administered on short-term leases. Lessee turnover is high because they sell the same merchandise and compete with cheaper Chinese retailers.

Zimbabwe’s residential market

Zimbabwe’s residential property market is driven by cash sales, mostly through diaspora remittances and small-scale miners. No mortgages are extended towards real estate because of the high cost of borrowing and currency uncertainty.

The high-density properties in Harare are priced between US$ 60 000 – US$80 000, medium-density at US$ 120,000 – US$ 250,000 and the low-density ones at US$ 500 000.

Zimbabwe’s industrial market

The industrial sector rental yields are currently averaging 13%, compared to 11% in H2 2023. These subdued yields are expected to persist in the short term until the positive effects of increased activity in primary production sectors, such as agriculture and mining, translate into increased demand for industrial space and related services.