Major corporates are increasingly relocating out of Harare’s central business district (CBD), “a clear structural shift”, amid rising concerns over ageing infrastructure, traffic congestion, parking shortages, and high fees, deteriorating utilities, and rising informality.
The shift reflects a broader transformation in Harare’s commercial property market, where companies are abandoning ageing CBD office stock in favour of modern suburban office parks offering better security, reliable utilities, and improved accessibility.
Vacancy rates in some parts of the CBD have climbed to nearly 60%, prompting firms to relocate to modern suburban office parks that offer better security, accessibility, and flexible workspaces.
Companies are increasingly favouring suburban locations such as Borrowdale, Avondale, Eastlea, Milton Park and Belvedere.
“Harare’s office market has recorded the delivery of approximately 12 000 sqm of new Grade A space, predominantly concentrated along the Borrowdale development corridor. Notably, the majority of this new stock is owner-occupied, limiting its immediate impact on the leasing market,” Knight Frank said in its new Africa Report 2026-7.
“A clear structural shift is underway, with major corporates relocating from the CBD to suburban office nodes, driven by deteriorating infrastructure, security concerns, and reduced accessibility within the CBD.”
The property consultancy said Grade A offices in suburban locations are now achieving net rents in excess of US$10 per square metre per month, typically under triple-net lease structures, where occupiers bear full operating costs.
“In contrast, CBD office rents average approximately US$5 psm per month, reflecting weaker demand. Vacancy levels remain elevated, estimated at approximately 60% in Harare and 40% in Bulawayo, while default rates are high at approximately 35%,” Knight Frank said.
“Development activity remains constrained, with high construction costs, driven largely by imported materials, limiting speculative office development.”
Research from leading property developers has also confirmed the structural shift.
“Rental yields remained attractive, averaging between 8% and 10% in targeted sectors, reinforcing property’s position as a preferred asset class for income generation and capital preservation,” Mashonaland Holdings Limited said in its trading update for the quarter ended March 31, 2026.
“Demand continues to shift towards decentralised suburban and peri-urban developments, with increased uptake of cluster housing and serviced stands.”
According to the developer, this demand is increasingly concentrated in modern, self-sufficient developments incorporating solar energy and reliable water infrastructure.
“Capital values increased by approximately 2%-3% in selected segments, although performance remains uneven,” it said.
“Well-located, serviced developments continue to outperform older CBD office stock and less competitive assets.”
Meanwhile, First Mutual Properties (FMP) noted that building owners are increasingly turning to small and medium enterprises (SMEs) rather than large corporates to fill vacant spaces, according to its quarter report for the period ended March 31, 2026.
“In the commercial segment, performance was mixed, with selective demand for modern, high-quality spaces, well-located retail and logistics space, while office occupancy, particularly for older stock, remained under pressure,” it said.
“In light of this, property owners have continued to repurpose old buildings to cater to small and medium-sized enterprises and start-ups that require small workspaces.”
Eagle Asset Management, fund managers of the Eagle Real Estate Investment Trust, said investor preference for US dollar-denominated income streams continues to support demand for quality commercial and residential developments.
This is particularly evident in suburban commercial nodes and emerging tourism corridors such as Victoria Falls.
NewsDay
