By Mark Mhukayesango
GWERU,December 7,2015- Businesses in the Midlands capital this year begun a massive exodus from the city centre
to the avenues as economic pressures mount were business cannot afford
to pay hefty rentals charged by property owners, Radio VOP can reveal.
Although in 2014 , some struggling businesses started moving out of
town, over 70 percent of small companies and some established entities
have also followed the great trek out of the central business district
to nearby suburbs like Athlone and Windsor Park where there is
relatively cheaper accommodation, according to a local real Estate
Businesses pay rentals ranging from $400 to $500 per month ,per room
in the CBD , rentals which do not resonate with productivity amid a
declining economy where profits are low.
Real Estate Agent, Trevor Dollar Real Estate has recorded low business
this year as companies continue to desert office space for more
Speaking to Radio VOP , Trevor Dollar Real Estate Director,Victor
Wasara said economic challenges have affected the real estate sector
as tenants cannot pay rentals on time.
He said the defaulting rate was too high as some tenants go for months
without paying their rentals.
“The defaulting rate is now too high because companies can not afford
to pay rentals,” Wasara said.
Wasara , said property owners would prefer keeping their buildings
empty than keep tenants who default payment.
“So most building owners would prefer to keep their buildings empty,” he said.
Gweru once the country’s industrial hub housing companies like
Zimglass , ZimAlloys among others has suffered heavy
deindustrialisation in the past decade, hence business has hit a
record low, with most companies providing services failing to stay
Cost of doing business have also become a hindrance to business,as the
Gweru city council continues to hike water and rates , whilst
electricity costs have affected business immensely.
NGOs like NANGO have also in the past years relocated to the light
industry due to donor fatigue and lack of finances.
Simba Guveya, a property consultant at Muso Investments said
:”Companies want to reduce costs of production by all means hence the
massive exodus. Rentals have become a huge cost factor which many
businesses try to avoid.”
Companies like Modrean Tiles and FinMark have relocated to nearby
suburbs, but avoiding costs has also cause many companies to lose
business to competitors.
“Although relocating has given companies breathing space in rentals,
they have lost business in the process. Companies should weigh costs
effectively because it might spell the demise of most businesses,”
House owners in nearby Athlone suburb have recorded brisk business
ever since companies began moving.
Normally occupied by Midlands State University (MSU) students , Athlone
has become a safe haven for companies.
“Where we are now, is still closer to town , so we will never lose
business. We have managed to address our costs structures and it wont
be long before we become profitable again,” CJ Kitchens, regional
manager Gracious Mupereri told Radio VOP.
The Zimbabwe Revenue Authority (Zimra has also continued to pursue tax
on unoccupied buildings,as the rentals defaulting rate soars.
As empty buildings have become a permanent feature in the CBD since
the beginning of the year , Zimra has not ceased demanding taxes
although there is no production taking place.
Wasara said it is unfair for Zimra to charge tax on unoccupied
buildings as the property owner is not earning revenue.
“Zimra still insists on tax and penalizes building owners even though
the building is empty. I think this is quite unfair on the land lord
because the defaulting rate is very high,” Wasara said.
Companies have also employed a strategy of keeping their buildings
unoccupied their buildings to keep the evade the tax men.
He said Zimra would only stop collecting tax on empty buildings if the
property owner notifies the tax authority, according to the law.
“Zimra now considers any plea that comes from property owners who have
empty buildings to be excused from the tax obligation,” said Wasara.
Gweru avenues have also seen a massive exodus from flats as tenants
fail to pay the rentals.
Property owners prefer dealing with corporates that individuals to
“It is a strategy that has now been employed by property owners to
deal with corporates than individuals because corporates have a low
probability of defaulting,” he said adding that defaulting is due to
job loss were families can no longer afford renting flats.
Former mining giant like ZimAlloys and glass company , Zimglass among
others have succumbed to industrial dearth, hence affecting other line
industries. This has grossly affected the occupation of commercial
property in the city.