Where rent can be paid in petrol

Posted On Wednesday, 03 December 2008 02:00 Published by
Rate this item
(0 votes)

Zimbambwe’s property investors have resorted to accepting petrol coupons in lieu of cash for rental payments.

 Andrew Golding

The country’s escalating inflation rate has meant some Zimbabwean investors have had to return to the barter system in order to receive some sort of payment for letting their properties.

Two weeks ago the Zimbabwe Reserve Bank announced that estate agents were permitted to sell properties for foreign currency.

Although a similar move has not been made for rentals, there is hope that “dollarisation” of that market will take place in the near future.

As of November 16, inflation stood at 11268758% — a 2000% daily inflation rate. Rental leases are reviewed monthly.

Francois Viruly, professor of property studies at the University of the Witwatersrand, says that in Harare you can rent office space for a litre of petrol per square metre per month. In addition to paying in petrol coupons, property owners accept US dollars.

Viruly says that by African standards, rentals in Harare are low at about 3/m² In Lusaka, for instance, rentals are probably three times higher.

Office vacancies in Harare, at less than 5%, are very low — as low as on the outskirts of Johannesburg.

Viruly says once the political situation stabilises in Zimbabwe, demand for office space will rise and scope for property development will resurface in the country.

Based on the above outlook, Viruly says that the opportunity to enter the property market lies in purchasing land for future developments.

Pam Golding Properties CEO Andrew Golding says the group’s Zimbabwe office has reported that the property market has turned from a sellers’ to a buyers’ market.

He says property there is still seen as an important form of investment, attracting great interest, especially from South African and Russian buyers.

“Buyers generally are seeking mainly investment property in a price range from 200000-450000 for residential property, and from $450000 upwards for commercial property.

“Despite the global economic crisis, Zimbabwe has yet to experience depreciation in house prices and the property market remains relatively unscathed,” says Golding.

There are four listed property counters on Zimbabwe’s stock exchange with a total market capitalisation of $40m.

According to a study by Viruly and Kura Chihota, a director of Leapfrog Property Group, the counters trade at a 75%-90% discount on replacement cost.

They say that the listed funds are not active in the market as there is little to buy and it is unattractive to sell property in Zimbabwe.

Last modified on Monday, 14 April 2014 12:27

Please publish modules in offcanvas position.