Businesses are leaving the central business districts (CBD) of major towns in Zimbabwe due to a combination of factors, including high rental costs, lack of access to financing, congestion, increased use of technology and economic challenges. The high cost of renting commercial space in the CBD makes it difficult for small and medium-sized enterprises (SMEs) to afford, and this has led to many businesses closing or moving to other areas.
Additionally, the economic challenges faced by Zimbabwe, such as high inflation and currency devaluation, have made it difficult for businesses to access financing and stay afloat. The result is that many businesses are choosing to relocate to other areas where operating costs are lower and the economic environment is more favorable. A favorite destination for business has been residential suburbs just at the edge of town.
There is concern among stakeholders that the central business districts (CBDs) of major cities like Harare and Bulawayo are becoming abandoned with an increase in vacant offices and buildings. Some suggest councils should pass bylaws to prevent the use of residential areas near the CBD as offices. The Minister of State and Devolution for Bulawayo believes high rentals are the cause of this issue.
The Minister recently officiated at the opening of Ngamla Supermarket at Nkulumane Shopping Mall in Bulawayo. She made a statement urging property owners to be mindful of the rentals they charged as small businesses (SMEs) that form the bulk of the Zimbabwean economy cannot afford a lot of the rentals that CBD landlords were charging.
'These premises are too expensive and a lot of shops have been closed as people move out due to high rentals.
As Old Mutual, you should consider reviewing your rentals here (Nkulumane Shopping Mall) and create a user-friendly atmosphere as you can see most of the shops are vacant.You would find major supermarkets, pharmacies and banks, hence people did not need to go all the way into the CBD from their residential areas.However, currently, it is a different story altogether as most of the facilities are all closed up and can now be accessed in the CBD.' she said.
Zim Pricecheck a company that researches and publishes prices in Zimbabwe recently noted that a lot of CBD property owners had hiked their rentals starting 1 January 2023. Where property owners used to charge around US$100 for a shared office or shop in areas like ZimPost Mall, tenants were now being asked to pay around US$150. The increases have been across the board with rentals being as high as US$1 000 for a single shop in the CBD. Most SMEs would bulk at such steep rentals.
