Corporates Abandon CBD Opting for Suburban Areas
Harare – The central business district (CBD) is grappling with high void rates and declining demand.
Knight Frank: Businesses Desert Harare CBD
The CBD office market is facing significant challenges as major corporations relocate to suburban areas, leading to increased vacancy rates and subdued activity in central business districts.
This trend is largely driven by challenges such as traffic congestion, poor infrastructure, inadequate parking, high operational costs, and noise pollution.
CBD Building Collapse Raises Questions
According to The Africa Report 2024/25, Knight Frank’s The Ultimate Guide to Real Estate Markets, which highlights performance and opportunities in the region, vacancy rates in these central areas are high, ranging from 40% to 60%, while demand primarily comes from small and medium-sized enterprises (SMEs) seeking smaller office spaces.
Corporates Abandon CBD Opting for Suburban Areas
In contrast, suburban offices are thriving, with occupancy rates soaring between 90% and 100%. This surge in demand has allowed suburban locations to command higher rental rates, ranging from US$12 to US$15 per square metre, compared to US$6 to US$10 per square metre in the CBD.
The average yield in the CBD remains around 8%, highlighting the disparity in market performance between the two areas. In the retail sector, ccupancy rates in malls and newly constructed suburban shopping centres are climbing, exceeding 80%.
“Demand is notably rising from informal traders, who dominate market activity and tend to focus on securing smaller units. In response, landlords are subdividing space into smaller units, particularly ground floor units, by offering space ranging from 9-50 square metres,” reads part of the Knight Frank in the report.
