Tourism, mining and health are among the property sectors that Old Mutual is looking at the most as part of a strategy to diversify its vast real estate portfolio.
Old Mutual is already one of the country’s largest property owners; its portfolio comprises over 500,000 square metres of property. Among these are Westgate, Highglen, Chitungwiza Centre and Nkulumane Shopping Centre. But, with these models slowing down as the formal economy shrinks, Old Mutual is looking at other growth areas to secure better value.
“In our strategy, we’re trying to expose ourselves to new areas. You have seen us doing developments in the tourism sector. We’re currently not in the healthcare sector, that’s also a sector we are looking at. We’re watching growth nodes within our economy, specifically mining, where we are also getting some exposure,” Marjorie Majiya, MD of Old Mutual Investment Group.
Last year, 78% of Old Mutual’s properties was occupied, in line with the industry average. This came down from 82% the previous year due to “deliberate evictions of non-performing tenants to improve quality of tenants”.
Old Mutual’s investment property is worth over US$460 million, according to its financial results.
Over recent years, Old Mutual has explored new types of property investments. In mining, the company has built an industrial complex at Ngezi, near Zimplats. It has also taken part in Zimcampus, a consortium that last year completed the Bulawayo student accommodation complex, which has 1,052 rooms.
Last year, Old Mutual partnered property company Troika Design Workshop (TDW) to build a US$12 million housing project in Harare’s Prospect area. Old Mutual has also invested in the Palm River Hotel in Victoria Falls.
Old Mutual is not alone in betting on tourism. Property company Mashonaland Holdings, in its own annual results, says Zimbabwe’s old hotel infrastructure is an opportunity.
“Emerging trends also indicate that property investors are preferring to invest in hospitality real estate in attractive tourism destinations in the country. This sector is forecast to record significant investments in the short to medium term as investors are looking to capitalise on an ageing hospitality sector offering in the country,” Mashold says.
Chas Everitt, the South African realtor that has just entered Zimbabwe, is also looking at tourism.
“In the hotel industry, Victoria Falls remains the national property development hotspot, with over US$150 million of high-end, mainly hotel development planned,” Chas Everitt COO Barry Davies says.
