Marcopolis

Zimbabwe Report

Marcopolis presents the Zimbabwe Report focused on topics such as economy, investments and doing business, featuring interviews with Zimbabwe's leaders. The sectors under review in this issue are agriculture & agribusiness, banking & financial services, construction & real estate, hospitality & tourism, industry, services, telecom & IT, and many more. 

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InterviewsDecember 19, 2023

Fine & Country Zimbabwe: Evolving Horizons in Real Estate and Global Presence

DKaren Nyenga, CEO at Fine and Country Zimbabwe
Karen Nyenga, CEO at Fine & Country Zimbabwe
Written by Sandra Francisco
Published: December 19, 2023

Interview with Karen Nyenga, CEO at Fine & Country Zimbabwe

Let's commence with a general overview and brief history of Fine & Country Zimbabwe.

I am Karen Nyenga, the licensee of Fine & Country in Zimbabwe. Fine & Country is a global real estate company, and our journey in Zimbabwe began on October 1, 2015. From my personal perspective, starting as a sales agent elsewhere and transitioning to become a director and business owner was a significant leap, with its share of valuable lessons. The process was thorough, and I underwent the necessary steps, gaining a comprehensive understanding of the industry over the years.

Our growth has been commendable, although the initial years were challenging, entering a market with established agencies and pre-existing expectations. Building trust was crucial, given the magnitude of real estate transactions and the inherent skepticism when a new player enters the scene.

A substantial part of our journey involved building a competent agent base. It was essential to hire individuals who not only represented the brand effectively but also upheld the same service standards I aimed for as the owner. Ultimately, our focus is on providing exceptional service to our clients.

Initially, our portfolio primarily comprised property management, starting with 8 properties and reaching 50 by the second year, encompassing both residential and commercial spaces. Sales listings gained momentum around the fourth and fifth years, contributing to our current management of approximately 130 properties, including residential, commercial, and complexes.

To add value to our clients, we established a dedicated desk for diaspora clients, offering consultations for those abroad seeking advice on their properties in Zimbabwe. We assist with repurposing properties, including subdivisions and reconstructions, ensuring they realize the full potential of their investments.

As we approach 2024, we reflect on our steady growth and look forward to further success in the years ahead.

What sets your real estate company apart in Zimbabwe?

In Zimbabwe, the real estate landscape is quite saturated with numerous local and internationally-affiliated agencies. Some are locally branded, with individuals establishing their own offices, while others have regional or international affiliations. The competition is robust within the real estate sector, as many professionals have acquired the necessary qualifications through university and postgraduate studies. Continuous Professional Development (CPD) is also a common practice.

While intellectual capacity may be a common differentiator, our distinctive edge lies in our affiliation with the Fine & Country brand. One of our most significant competitive advantages is our ability to offer services not only within Zimbabwe but also across the African continent and beyond. As part of the Fine & Country network, we can seamlessly provide services from Zimbabwe to Europe, Australia, the Americas, and beyond. This global reach allows us to sell properties in different countries, showcasing our offerings without the need for venue rentals or establishing trust from scratch. Most individuals, in their daily lives, have likely encountered a Fine & Country office, contributing to a built-up reputation of trust.

Moreover, our distinctive position is advantageous for both Zimbabweans and the international expatriate community. Individuals entering Zimbabwe for reasons such as work, leisure, or retirement benefit from our specialized approach, ensuring a smooth transition. For instance, someone relocating from the UK to Zimbabwe may already be familiar with our UK office and come as a referral from the international office. This dual stream of business from both sides significantly contributes to our success.

What are the current trends in the real estate industry in Zimbabwe?

Regarding the state of the property industry, it is truly an exciting time to be part of it. In my view, we have witnessed substantial business growth during our operational period. One key observation is the increasing interest in investing in the real estate market, as it currently stands out as the better-performing asset class.

Homeownership is a significant consideration for many Zimbabweans, whether it is acquiring land for construction or opting for pre-constructed first-entry homes. People are consistently exploring the best ways to invest their finances, often leaning towards homeownership or some form of property ownership through construction. This has led to a noticeable surge in property developments.

Cluster homes, in particular, are witnessing a considerable upswing in construction activities. This is not confined to Harare, the capital city; we are witnessing similar trends in Bulawayo, the second-largest city, and even in the Victoria Falls area, a major hub for hospitality. Developers are constructing cluster homes to accommodate a growing demand, whether for Airbnb facilities or housing for middle and senior management staff associated with boutique hotels in the area.

In the Eastern Highlands, the developer Grand Homes has made an entrance with impressive structures. Corporate entities are also contributing to the residential landscape by constructing complexes. The activity is not limited to residential areas; there is significant activity in light industrial zones.

Harare, in particular, is attracting attention for light industry and retail businesses. The prime location is along Harare Drive, the circular ring road around the city. Businesses engaged in light industry or retail prefer to position themselves in the Pomona section, considered prime land. Many businesses, including wholesale and electrical sales operations, are strategically located in this area, providing direct access to the market and key decision-makers. Even listed companies are investing heavily in this specific region.

Overall, there is a remarkable amount of activity and potential in both residential and light industrial sectors. The demand is robust, and it seems like we might be struggling to keep up with the industry's growing demands here in Zimbabwe.

What types of residential homes or commercial properties do you manage?

Well, in our portfolio, we offer a diverse range. It is not limited to just townhouses or standalone houses. We have a mix that includes apartments, both singular units in a block and entire blocks under our management. Currently, we oversee about four complexes of varying sizes, some predominantly owned by a single individual, while others have multiple owners. Unlike what you might find in the United States or the UK with cooperative setups and dedicated building managers, we often act as the managers for individual apartments, working independently from the direct body's corporate manager.

Our listings cover a spectrum, including homes, apartments, complexes, standalone townhouses (both detached and semi-detached) in the north and west regions. Additionally, we manage some commercial and industrial properties, offering services across various domains. Previously, we even managed horticultural blocks for a client who provided plots for small animal husbandry and horticulture projects near Harare, catering to the 'farm to plate' concept. However, as time passed, we realized that we lacked the necessary expertise to offer adequate advice. Consequently, we transferred the management to another client who has since excelled in growing the portfolio, particularly in the lucrative blueberry market, where Zimbabwe has been making significant strides.

Could you provide details about your involvement in construction?

We have been expanding our business to offer a diverse range of products to our clients, particularly catering to diaspora-based Zimbabweans seeking guidance. Trust is crucial, especially when dealing with assets like homes. When clients inquire about their options, selling is often the easiest route, but many prefer to maintain a base in Zimbabwe. In terms of in-house construction, we have qualified and registered architects, surveyors, engineers, and contractors. Over the years, some clients have requested us to construct passive income properties on the excess land they have, typically in the northern suburbs where properties often sit on an acre of land. Clients may subdivide and sell portions or choose to build additional units for various purposes, such as for their children or future retirement.

Our experience in these projects led to the establishment of DevCo . With qualified professionals, we navigate planning processes with councils, ensuring compliance and identifying the most suitable and budget-friendly approaches for our clients. Beyond servicing existing clients, we have undertaken developments that are now on the market for sale. Our focus is on creating affordable properties, aiming for those below 100,000 to tap into the local cash market and individuals obtaining personal loans in the diaspora. These properties offer excellent rental returns, ranging between 6.5% and 9% for long-term tenancy. For those exploring short-term accommodation options like Airbnb, the return can go as high as 12% to 15% per annum. We believe these figures are favorable, and our goal is to continue and potentially expand this venture in the next three to five years. It is an exciting journey for us at the moment.

We are interested in hearing about your vision for the company in the next three to five years. What do you hope to achieve during that time frame?

Ideally, within the next three to five years, our DevCo would take on a more prominent role compared to our current emphasis on sales and rentals. We anticipate substantial growth in the development company segment of our business. The reason for this lies in the considerable number of properties that have been offered to us, surpassing our initial expectations. With the contracts we have signed, we foresee a business that will extend over five to eight years to service. It is important to note that this projection is based on our current holdings and not what may come in the next few years. This gives us a solid stock, allowing us to offer competitive options to investors, both local and international.

One challenge we have faced is the varying property prices in Zimbabwe. Unlike other countries where you often find a standard cap for properties in a specific area, Zimbabwe's market is diverse. Prices can differ significantly even on the same road, with variations in size and features. With DevCo, our goal is to provide clients with a clear understanding of the return percentage for the properties we offer. Additionally, we aim to offer security to investors through rent control and effective management of the entire property block. While we can currently manage one or two units in a complex, this does not provide our clients with the assurance that all aspects outside of their unit will be well-managed. In the next three to five years, we foresee DevCo taking the lead and steering the rest of the business.

 

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