NRZ Pension Fund remodels properties

Rutendo Nyeve, Sunday News Reporter

THE National Railways of Zimbabwe (NRZ) Pension Fund is remodelling its properties as part of urban regeneration that seeks to optimise returns for the benefit of its members, a development that has however, sparked an outrage from its tenants. 

The fund has further reviewed its rentals upwards to figures which some of its tenants have described as exorbitant with consequences that might leave them closing shop. The fund has, however, defended the reviews saying they were based on prevailing market rates.

A number of tenants have been observed vacating properties owned by the pension fund in the Bulawayo central business district (CBD) in recent weeks after failing to meet new rental conditions, while some have moved to pave way for renovations to the buildings.

 

Sunday News reached out to the fund’s Acting Principal Officer Mr Alfred Mandira who revealed that the fund was remodelling its properties in the CBD to re-purpose some of those that were idle.

“Within the office sector, the demand for offices has dropped. As a result, most of the office buildings are lying empty. It has therefore become necessary to re-purpose (find alternative use) most of these buildings. This is what the fund is trying to do, to regenerate the CBD and avoid buildings lying empty and dilapidated. Where necessary tenants are being offered alternative accommodation in other buildings within the Portfolio,” said Mr Mandira.

Pioneer and Africa Houses in Bulawayo are some of the properties that are set to be remodelled from retail and offices to retail and residential apartments. In Harare, Electra House and Chester House which are commercial and retail are set to be remodelled to retail and residential apartments as well. Mr Mandira said on the retail sector, the economy was now highly informal, dominated by Small to Medium Enterprises (SMEs) thus their shop spaces were now too big to accommodate them.

“The existing shop spaces are too big to accommodate SMES. What the fund is trying to do is to sub-divide big shops and create more space which can accommodate more small traders and allow them to have own leases rather than being sub-tenants. Rent is price for leased space and where the demand is high and supply is limited price can increase. In a nutshell, the fund is considering remodelling some of the buildings within the portfolio as part of urban regeneration as well seeking to optimise returns for the benefit of its members. As such, rent reviews are based on prevailing market rates,” said Mr Mandira.

Some of the tenants who spoke to Sunday News on condition of anonymity said the rentals have been reviewed to exorbitant figures making it unaffordable for SMEs. 

“The rates have gone up by more than 300 percent in the last few months and it is difficult for us to afford them. We are SMEs and we do not make that amount of money within these premises. There has also been change in property agents and some of them have been literally harassing us,” said a source who spoke on condition of anonymity. 

Mr Mandira, however, defended the review of rentals saying they were even lower than the market rates.

“What we did was to subdue our rents during the Covid-19 pandemic as our clients had also lost business. However, we have been gradually reviewing upwards to match the market rates which  are even lower in comparison. As for the property agents, due processes are done and we have to appreciate that unlike back in the day when we had few players in the property agents’ industry, we now have a number and if they meet the bar they are awarded (tenders),” said Mr Mandira. 

The NRZ pension fund has more than 70 properties countrywide within its portfolio. — @nyeve14