REIZ Newsletter 2nd Issue August 2015

REIZ Newsletter
Published by The Real Estate Institute of Zimbabwe
REAL ESTATE NEWS
August 2015
REIZ Newsletter
In This Issue

Reflections @70

President’s Desk

Long Service
Awards

The Winter School

Website Guide

The Interview

Winter School in
Pictures

Past Presidents

Supplement
EDITORIAL
Editors
The Institute Board
Publicity Committee
Bennias Gweme
Francis Chinjekure
Contributors
REIZ Research
Design & Layout
Francis Chinjekure
Reflections @70
During our 2015 edition of the Annual Winter School and AGM at Chengeta Safari, one would be greeted at
every corner by a banner that read REIZ @70. It is indeed a memorable occasion, one different from the experiences we had over the past years. Yes the Institute turned 70, a milestone that we celebrated on the occasion
and we today continue to celebrate. However, it is important at this juncture that we take a moment and chronicle the past, celebrate the present and map the future. The success that we celebrated are the efforts of our
predecessors and it is in our hands as the predecessors of tomorrows generation that we leave a trail of success that the future generation will be found celebrating in years to come. We are all indebted to preserve and
seek further achievements in as much as our hands are untied.
Formation of the Institute
The Institute was formed in February 1945 with an Inaugural Meeting of the then called Southern Rhodesia
Institute of Estate Agents and Valuers held on the 12th of the same month and the first members duly elected.
Later on in May 1947 the Constitution, Rules and Byelaws were adopted, under which the Institute has pursued its objectives up to this day, and some years later initiated action which resulted in the proclamation of
the Estate Agents Act 27.17, the Valuers Act 1996, and subsequent amendments.
Our Objectives
The Institute seeks to unite in one body all persons practicing various disciplines of the real estate profession.
It is in our endeavor to secure the advancement and facilitate the acquisition of that knowledge which from
time to time constitutes the profession of real estate and to maintain and promote the usefulness of the profession for the public advantage.
We also seek to protect and promote the general interest of our members and the real estate profession at
large and in the same light we endeavor to promote the highest standards of professional ethics and conduct
of our members.
The Success Story
Today the Institute boasts of more than 200 members and continues to train students on a yearly basis forming the heart of the real estate sector in Zimbabwe. Through its existence the Institute has defined the skyline
of many towns and cities in the country. The Institute has immensely contributed to developing Zimbabwean
infrastructure through its members. Our members in their various capacities from stake holders, CEOs, Senior
Practitioners, managers, in fact at all levels in the property value chain, continue to develop the nation.
The Future
Challenges are opportunities and the Institute in its future plans intends to concentrate on proffering solutions to the challenges that the real estate market has and is succumbing to. Some of the challenges the real
estate sector is facing include the liquidity crisis, proliferation of bogus estate agents, low market activity,
valuation challenges, voids and rental arrears. The Institute will therefore help in addressing the intertwined
challenges through research, adoption of international standards, professional training and provision of innovative solutions by working with like-minded organizations in the same space.
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The Real Estate Institute of Zimbabwe
Dear Members
The 2015 Winter School
The 2015 edition of the Winter School which coincided with the
70th Anniversary for the Institute was held on the 3rd of July
2015 at Chengeta Safari Lodge. REIZ as outlined, is determined to provide real estate education to members and the
nation at large. It is in the same light and quest that the Winter
School was held. Seven speakers shared their knowledge with
the real estate community who gathered on this day. It was a
life changing event as much of the attendants would confess
as they managed to grasp a handful of points from the
knowledge the speakers had to share.
The day started with a keynote address by the outgoing President Mr. Mhlanguli Mpofu who thanked the attendants who
found time to prioritize knowledge acquisition and improve their
professional standing. Speaker after speaker took to the podium to share their knowledge from diverse professional backgrounds.
The managing director of Barclays Bank Zimbabwe Ltd and
immediate past president of the Bankers Association of Zimbabwe (BAZ)Mr. George Guvamatanga weighed in and gave an
overview of the mortgage market in Zimbabwe. He shared the
nuggets he believed are essential to unlock the mortgage market in Zimbabwe. He lamented on the difficulty in accessing
mortgage finance in the country which has left a significant
portion of the population failing to have “own roof” over their
heads. He continued and indicated that the best practice the
world over is “lower mortgage rates and long tenor “i.e. in simple terms affordable interest rates and increasing the tenor of
the mortgage to above twenty years is what he believed would
help resuscitate the market. He went on to challenge real estate players to safeguard their territory and protect their turf
from unscrupulous players if they are determined to restore
confidence in the market and also to weed out bogus estate
agents.
The past few years have been a challenging experience to the Institute and the
economy as a whole. With the depressed
economy which is not performing and similarly, as the real estate fraternity we have
not been spared from these vagaries, let
alone the Institute.
This year we mark 70 years since the Institute was founded. Seventy years is itself a
testimony that we have went through a lot
of transformation over the years. We have
survived throughout the hardest times such
as the liberation struggle that went on for
14 years until ceasefire in 1980 and it is the
reason we still flourish in this day. We are a
REIZ President, Siza Masuku
tried and tested name in the history of this
country and we should endeavour to achieve more than our predecessors. The future belongs to us and it is rightfully in our hands that we continue to take the Institute up the ladder of success.
The hard times that beset us should not be a reason to throw in, they do not define
us, but they will help us move forward. Let me assure you that moving forward is not
a rhetorical statement, but an opportunity and a responsibility for all of us. As I enter
my first full year as the 43rd President of the Real Estate Institute of Zimbabwe, I
bring to you a message of hope that in my tenure I will work tirelessly to deliver all
the promises and resolutions we have adopted at the recent 70th AGM at Chengeta
Safari Lodge. With a great team made up of my colleagues in the board, the institute
members and a vibrant secretariat everything is possible.
Over the next year, I will work tirelessly together with my team to strengthen the
foundation that is already laid and enforce all the resolutions and plans we have
adopted to ensure a vibrant and sustainable running of the Institute. In fulfilling my
promises and guided by the Institute’s Constitution I will work with the Board, Secretariat, members of the Institute, Estate Agents Council, Valuers Council, Property
Owners Association of Zimbabwe and all other like-minded bodies who share the
same vision as ours. I have also made a promise to seek affiliation with international
organisations, a promise that I will live to fulfil. Joining hands with like-minded orZimbabwe went through a land redistribution exercise more
ganisations and international affiliations will enable us to explore new and better
than a decade ago. Land is an asset and it has to be treated as
means of carrying out our mission and stewarding the resources in our charge.
such. However, senior partner at Mhishi Legal Practice and
also immediate past president of the Law Society of ZimbaThe Institute has all the pieces, expertise, passion and commitment to be the best. I
bwe ,Mr. Lloyd Mhishi as he noted in his presentation on land
will ordain myself in the same spirit and principality to make sure the best happens
issues in Zimbabwe, most of the land that is agricultural is still
up to the expiry of my term of office and beyond. My goal is to connect those pieces,
unbankable. He then suggested that as the real estate fraterniso that together, we can become a more sophisticated entity from the inside out.
ty we need to come up with propositions to the government
How do we do that? In simple terms, we get back to the basics and our mission. We
that can facilitate the commercializing of agricultural land. Mr.
move away from negative perception and mentality that has inherently hindered the
Mhishi also handed a book he has authored to the then Instiwhole economy. We also set goals and strategies to grow, improve, inspire, connect
tute President, Mr Mpofu on the day.
and make the Real Estate Institute of Zimbabwe an example to follow, not just in the
nation, but the world over.
Real estate investors, banks, developers and asset managers
are all chasing the little capital that is still in circulation. It has
President
been proven the world over that pension funds are the biggest
contributor of finance in real estate developments and invest- Siza Masuku
ments.
>>>To page 4
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The Real Estate Institute of Zimbabwe
Past Presidents
C.F. OSMOND
1945
J.W.R. SKEA
1946
P.A. JOUSSE
1947 -52
J.W.R. SKEA
1953
P.A. JOUSSE
1954 – 1957
B.G. ABRAHAMS
1958-1959
K.R. LOCKE
1960 -1961
R.D.K. SILBY
1962 - 1963
K.R. LOCKE
1964
R.E.G PARSONS
1965
K.R. LOCKE
1966
R.I WATSON
1967-1972
K.R. LOCKE
1972 – 1973
B.G. ABRAHAMS
1973-1974
R.W. HADFIELD
Long service award recipient Mr. Wallbridge holds his certificate of appreciation.
Long Serving Members Honored
As we celebrate 70th Anniversary this year we have decided as the Institute to honor success and commitment
by issuing long service award certificates to our long serving members. The member’s certificates were accompanied by an appreciation message for their commitment to the Institute. The certificates are a symbol of longterm commitment and loyalty of the Institute members who have achieved significant milestone years of service. The awards were held at a colorful ceremony on the 4th of July 2014 during the Institute Annual Dinner at
Chengeta Safari Lodge.
The Awards recognized Mr. Raymond Wallbridge as the longest serving member of the Institute with a whopping and sterling 45 years of exemplary service. Other recipients of the accolade are Mrs. Bridget de Caila, Mr.
Tavenganiswa Mabikacheche and Mr. Lovemore Chivaura with 33, 33 and 30 years of service respectively.
The purpose of the awards is to strengthen the relationship with our members through recognizing and honoring the commitment and dedication of long standing members, while also promoting long-standing service to
the Institute. The Institute success relies on your commitment to serve as members, you are the pillar of our
strength and the foundation on which we stand firm upon. As such, we recognize and reward your loyalty, dedication and commitment to go beyond the call of duty but also for your submission to serve the Institute, even
without a call.
1974-1975
J.L DRYDEN
1975-1976
We value the contribution you make to keep the Institute on its feet and we want to celebrate your achievements. We strive to provide incentives that help you benefit from the growth of Institute.
V.O.C. SHARP
1976- 1977
R.W. HADFIELD
1977-1978
J.K. GIBBONS
1978-1979
W.R.L. STUTTAFORD
1979-1980
J. MANDE
1980-1981
The Institute wishes to advise members, the corporate world and the general public that we will be flighting a
supplement covering the 70th Anniversary, Winter School and AGM. To place adverts or congratulatory messages contact the publishers on the contacts provided with respective dates of publication.
20 AUGUST
Christobel Washaya is coordinating the supplement and can
be contacted on Harare telephone numbers on 04-7815717, fax 04-757121, or Email
[email protected].
PAGE 3
21 AUGUST
Tendai Kadira is the contact Advertising Executive and is reachable on
073 4 742 101
OR
077 4 800 975.
Email [email protected]
The Real Estate Institute of Zimbabwe
M.F. DEEGAN
1981-1983
R.J.D. WALKER
1983-1984
P.G. RIDGEWAY
1984-1985
G.E. POCOCK
1985-1986
R. WALLBRIDGE
1986-1987
M.F. DEEGAN
1987-1988
J.R. FOX
1988-1990
G.E. POCOCK
1990-1991
G.C. MULLETT
1991-1994
G.N BRAKSPEAR
1994-1996
A MAZARIRE
1996-1998
L. TADERERA
1998 -1999
L. CHIVAURA
1999-2001
O. NYAKUNIKA
2001-2002
R. WALLBRIDGE
2002-2003
A SADOMBA
2003-2005
N.T. KUIPA
2005-2007
B. MUTEMBWA
2007-2009
F. NYAMBIRI
2009-2011
A.N. KWANGWAMA
The Winter School Cont’d <<< From page 2
Mrs. Chipo Hlabangana, Deputy Principal Officer Finance & IT, NRZ Contributory Pension Fund shared with the real estate
community their criteria of requirements for them to invest in real estate development and investment projects. Pension Funds
invest mainly through listed equity, fixed income and alternative asset classes.
Lack of National Policy to promote property development and lack of capital are some of the challenges faced by property developers as Mr. Justin Machibaya of Homelux real estate noted. Apart from the challenges he highlighted the establishment of
new cities and creation of new zones as advantages that can be exploited to enhance property development. He challenged
developers to adapt to international standards of construction as a cost cutting strategy and also to tap in to the informal sector.
The real estate community has been challenged to update their leadership skills. Mr. Sebastian Zuze who is an Executive Director of the Standards Association of Zimbabwe spoke about the leadership skills for the 21st Century. He shared some questions
that helps individuals to identify their inner leadership self. He went on to describe the characteristics of a good leader and finished by presenting a challenge to everyone to make a difference and not just make a living.
Dr. Eve Gadzikwa the Director General SAZ, Chairperson ZSE and also Chairperson of the IoDZ spoke about corporate governance issues in real estate. Her presentation was well targeted on balancing personal interests and client interests. She challenged the real estate community to refrain from poor ethics and greed. Good corporate governance is entrenched in the ability
to separate control, ownership & balance of power she said. Most of the real estate practitioners are owner managed and do not
have boards she noted as a point of concern and later on donated a copy of the National Code on Corporate Governance in
Zimbabwe to the Institute which she handed over to the then vice president, Mr. Masuku .
Mr. Samuel Chidhuza the Property Investments Manager at the National Social Security Authority also took to the podium to
speak about occupational safety and health issues. He made reference to several legal guidelines that are supposed to be followed for the safety of employees and clients in buildings and infrastructure that house our businesses. In common law jurisdictions, employers have a common law duty to take reasonable care for the safety of their employees.
The then Vice President and now the reigning president of the Institute Mr. Siza Masuku gave the vote of thanks signaling an
end to the programme of the day. The Institute also held a dinner and price giving ceremony on the 4th of July where long serving members, best students and golf awards were handed over to the respective winners. Honourable Webster Shamu who is
the member of parliament for Chegutu East was the guest speaker of the day.
2011-2013
M. MPOFU
2013 -2015
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The Real Estate Institute of Zimbabwe
The Institute wishes to share with members and the public at large that the issues of convenience and accessibility have been solved as we happily
announce the launch of our new website. We are dearly committed to advancing real estate knowledge and convey important messages to the real
estate community and we believe the website will go a long way in affording us such an opportunity. Among other things the website ensures that we
are available 24/7 and it also improves our customer service and thereby improving and enhancing our professional standing.
The website will soon be allowing members to make payments in the comfort of their homes through an integrated platform called Paynow. Members
can also access industry wide resources such as Acts of Parliament, newspaper articles and research publications. Application forms for membership
are provided in the membership section together with the benefits of joining and the list of all our members. The resources s ection apart from the
above also features details of the Real Estate Executive Diploma which the Institute offers. Research publications and past papers from previous
presentations are available on the research section of the website. The Institute Newsletter is available for download on the website and the blog features current articles published on the real estate sector and market opinions by the research desk.
Some of the resources and functions are however exclusive to membership, and members are encouraged to register on the website and login using
their registration credentials in order to gain full access. Depending on your subscription status your account maybe activated or deactivated.
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The Real Estate Institute of Zimbabwe
FM: To what extent are real estate companies reducing their rentals to
attract tenants?
SM: The percentage rates vary as some property managers and owners
are negotiating rates of between 5 and 20% . However, higher percentage reductions exceeding this threshold have been noted.
FM: On estimate, how many real estate companies are registered in Zimbabwe?
SM: According to the Estate Agents Council, which is the licensing authority and plays a supervisory role for practicing real estate practitioners,
there are about 234 registered firms as of December 31 2014. Harare has
the largest number of registered firms consisting of 85% of the total.
The President’s Interview with the Zimbabwe Independent
FM: How many real estate companies have collapsed since dollarisation?
Zimbabwe Independent business reporter Fidelity Mhlanga (FM) this week SM: There are a number of firms which have been closed down due to
spoke to Real Estate Institute of Zimbabwe president Siza Masuku (SM) some of the above stated reasons, for example, Fox and Carney, Re Max
on how real estate sector is faring. Find excerpts of the interview below:
and Ubuntu Properties, just to name a few of the popular real estate
firms, while some recently opened businesses found the going too tough.
FM: To what extent has the liquidity crisis affected the viability of the real
estate industry?
Other real estate firms have since been stopped from practising as they
failed to comply with registration and renewal requirements like the need
for a current compensation fund certificate, having a principal registered
estate agent and paying an annual registration fee.
SM: To a large extent, the liquidity crisis has had various adverse effects
on the property sector, the prominent one being the absence of major
commercial property investment activity. Traditional players have withdrawn from the market due to liquidity constraints. A limited number of
major commercial real estate transactions have been recorded in Zimbabwe over the last 18 months. As a result of the liquidity crisis, there is limited and expensive funding, which is mainly responsible for the subdued
activity in the market.
FM: What’s your comment on the assertion that property which was used
as collateral by banks was overvalued after dollarisation?
SM: Soon after dollarisation (2009) to about 2012, the economy rebounded from the effects of hyperinflation and in tandem resulted in property
values resonating to the economic dispensation at the time. This period
FM: What is the implication of more tenants evacuating the Central Busi- was characterised by businesses taking positions and leveraging their
ness District?
immovable assets to access funding for retooling purposes from financial
institutions and were buoyed by these good values. Furthermore, the
SM: The high default rate on rent receipts by real estate companies is
properties were valued by applying the rental rates which were obtaining
impacting negatively on their businesses as they have to spend good
at the time, and therefore, the valuations were correct at that time, as the
money chasing after bad money.
process involves using the achieved rentals and capitalising them.
FM: What’s the percentage of voids in the CBD for most real estate comFM: What should be done to address problems affecting the property
panies?
sector in Zimbabwe?
SM: From research carried out among a number of the major players in
the sector, the voids are in the region of around 30% while for retail space
it is less than 1%. We are beginning to experience increasing voids for
retail space as retail tenants grapple with poor business resulting from low
disposable incomes and mushrooming of vendors in the CBD.
SM: There are few business decisions which are concluded in the world
without the involvement of real estate as collateral or a conduit to accessing finance for development or working capital needs. With the current
liquidity constraints affecting the economy, the property sector is also
affected since there are insignificant inflows of foreign direct investment in
comparison to neighbouring countries like Mozambique and South Africa
who received US$7 billion and US$$10 billion respectively in 2013, while
Zambia and Botswana also received significant inflows. With the recent
signing by government of multi-billion dollar power generation, lucrative
mining and infrastructure development deals, Zimbabwe is poised for
economic growth in line with the ZimAsset policy of economic recovery
over the next five years.
FM: What’s the standard rental cost per square metre in the CBD?
SM: Prime retail space is fetching between US$20 to US$25 for space
less than 100sqm for sitting tenants and in new lettings. Space exceeding
100sqm is commanding lower rates. For office space in Grade A buildings
which are modern, I would say the majority are achieving net rents of between US$7 to US$9/sm. In older buildings, lower rent rates are the order
of the day...
>>>To page 8
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The Real Estate Institute of Zimbabwe
The Winter School In Pictures
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The Real Estate Institute of Zimbabwe
The Interview Continued
President
<<< From page 6
Siza Masuku
FM: What other problems are affecting the real estate sector apart from the depressed economic activity?
Vice-President
SM: The real estate sector has its own challenges like unlicensed, unregistered, unregulated players who are
causing serious problems to registered firms. These unlicensed players do not follow any professional ethics,
undercut fees and do not comply with the gazetted scale of fees which all professional firms subscribe to.
Luke Matimba
FM: What is the contribution of real estate business to the country’s Gross Domestic Product (GDP)?
SM: According to the Reserve Bank of South Africa’s 2013 statistics, real estate and associated services contributed about 22% of GDP in that country. Locally, we are yet to obtain relevant data for this exercise, but it
should be analysed from the contributions of various tax heads in which the real estate is exposed to ie capital
gains tax in the event of a sale of a property, conveyancing, propety tax, value added tax, presumptive tax, income tax, paye. The contribution of real estate should therefore be analysed within the same framework in the
absence of definitive data.
Board Members
Mlhanguli Mpofu
Eunice Chimba-Mugabe
Emmanuel Mutambirwa
Monica Mutero
Polite Ngwenya
This interview first appeared in The Zimbabwe Independent
Alexander Millin
Feedback & Suggestions
Aubrey Tafira
Your feedback is very important in making us meet your expectations so please do not hesitate to contact us on
the addresses provided or email [email protected].
Meeting Gomba
Important Notice
Mike Juru
Victor Wasara
Members who are in arrears with their subscriptions are advised to settle their dues or risk action being taken
as per the constituitional dictations.
Contact Us
Postal Address
P.O Box HG898
Highlands, Harare
Physical Address
24 Mon Repos
2nd Floor South wing
Newlands Shopping Centre
Enterprise Road
Harare Zimbabwe
Phone
(04) 746356/746400
Fax
(04) 776748
Email
[email protected]
www.reiz.ac.zw
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