Nyashadzashe Ndoro- Chief Reporter
Zimbabwe’s two largest cities, Harare and Bulawayo, are experiencing a mass exodus of businesses from their central business districts, according to a new analysis by real estate consultants Knight Frank Zimbabwe.
The report highlights a significant transformation in the commercial property landscape, with companies increasingly opting for suburban locations over the traditional CBDs due to multiple challenges.
Vacancy rates have reached alarming levels, with Harare’s CBD at 60% and Bulawayo’s at 40%. Several key factors are driving this shift. Knight Frank attributes much of the decline to aging and poorly maintained infrastructure, which has become a major deterrent for businesses.
Adding to these concerns is a 13% increase in crime within the CBDs between mid-2023 and December 2024, according to the Safeguard Crime Report 2024. Limited and expensive parking options in the city centers—where casual parking costs an average of US$1.00 per hour—have further pushed businesses toward suburban areas, where parking is largely free.
The data reveals a clear trend of decentralization. In Bulawayo, an estimated 30% of businesses previously based in the CBD have relocated to suburban areas such as Suburbs and Khumalo between 2020 and 2024. Harare is witnessing a similar pattern, with major banks either having already moved, in the planning stages, or actively constructing their new headquarters in northern suburbs like Highlands, Newlands, and Borrowdale.
Traffic congestion and high rental costs have also fueled the exodus. Traffic congestion in Harare’s CBD has surged by 30% in recent years, making suburban locations more attractive. While rental rates in the CBDs average US$6.00 per square meter—lower than the suburban average of US$10.00 per square meter—the additional benefits of free customer parking and improved accessibility make suburban office parks the preferred choice.
Knight Frank’s analysis also sheds light on Zimbabwe’s residential real estate market, which is largely driven by cash transactions, supported by diaspora remittances and small-scale mining activities. With high borrowing costs and currency instability, mortgage lending has nearly ground to a halt.
Property prices in Harare vary by density, with high-density areas ranging from US$60,000 to US$80,000, medium-density homes priced between US$120,000 and US$250,000, and low-density properties commanding upwards of US$500,000.
A troubling trend in the commercial sector is the rise of “passive voids”—vacant spaces with little prospect of being leased. These empty offices and industrial spaces have become a long-term burden on investors, who continue to incur costs for maintenance, municipal rates, taxes, insurance, and security.
In contrast, the retail sector remains active, with vacancies being temporary rather than structural. However, the informalization of the market has affected the quality of tenants occupying CBD retail spaces, weakening rental yields.
Rent default rates vary across different property classes. The retail sector remains the least risky, with defaults below 10%, while the office sector sits at 15%. The industrial sector faces the highest risk, with default rates exceeding 25%.
Despite the risks, retail tenants remain motivated to keep their spaces, as their businesses can quickly adapt to market trends. However, Knight Frank notes that declining tenant quality has negatively impacted rental rates nationwide. Only prime locations and high-end properties have managed to maintain premium values.
Current property yields stand at: Office sector: 9%, retail sector: 8% and industrial sector: 13%.
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