Zimpapers Logo

Business Reporter
OLD MUTUAL contends its property rentals are competitive in light of prevailing market rates, despite the recent exodus tenants citing “exorbitant” rentals.
Old Mutual marketing executive Ms Lindah Mariwande said the firm’s property rentals were in line with the prevailing open market rates used by other players.
She said Old Mutual had, in fact, reviewed its rental rates downwards after dollarisation, in recognition of the negative impact high rates have on the real estate sector.
“Against this background, at the start of dollarisation, Old Mutual implemented relatively low rental rates in order to assist tenants adjust to the new reality and stimulate economic growth.
“Even with this current review, the Old Mutual rentals still remain below the general Zimbabwe market levels,” she said.
Old Mutual runs one of the largest property businesses in Zimbabwe and owns the High Glen Shopping Centre, Chitungwiza Town Centre, Westgate and Eastgate shopping malls, all of which have experienced a massive exodus due to high rentals.
The company’s prime rates are US$25 per square metre for industrial space, US$6 per square metre for offices and US$10 per square metre for the retail industrial space.
Ms Mariwande said Old Mutual was struggling to get a fair return on investments for its stakeholders.
The firm said while they remain sensitive to the plight of its tenants, it had on obligation to the beneficiaries of their investment portfolios.
“The property portfolio managed by Old Mutual belongs to pension funds and policyholders, with the ultimate beneficiaries of this investment being pensioners, widows and orphans, who have very low incomes.
“Old Mutual, like any other property manager, has a duty to ensure that the buildings realise fair returns and hence it is imperative that all tenants occupying Old Mutual’s commercial properties pay fair market rentals.
“In the Old Mutual property portfolio, there is unfortunately a situation where tenants have remained in situ but have not paid any rent or operating costs since the introduction of the hard currency in February 2009.
“In such a situation, Old Mutual has to redirect funds meant for payments to pensioners towards the occupation expenses of these non-paying private-owned businesses.
“As Old Mutual Zimbabwe, our investments are made for the benefit of our policyholders, meant to meet their needs and expectations in terms of return.
“The regular review of our property investments and the adjustments made to the associated rental fees are critical to the ongoing sustainability of our business and our ability to protect the interests of our customers,” said Ms Mariwande.