Harare City Council (HCC) is planning on renovating some of its properties and converting them into SME markets, a move which many property owners have made recently. HCC wants to renovate Samora Machel Parkade and convert it into an SME Mall. To maximise on revenues they intend to deal directly with intended tenants not middleman who have now dominated that space through corruption at Town House. Council properties are relatively cheap to rent, typically going for no more than $10 per square metre (sqm) compared to about $30/sqm charged by most large and listed property companies. However, neglect has led to properties like Samora Machel Parkade being sleeping places for the homeless people who shelter themselves there at night and the dark corners of the mall are used as toilet facilities. The corridors are dark due to non-replacement of lights and full of urine and waste smells which repels most shoppers from visiting the mall. It is high time HCC renovated such malls and take the real estate business seriously, however, due the the financial woes at HCC, such a project can only be done through partnerships with property developers.
HCC constructed an SME market named Harare Gulf Sunshine Bazaar for a reported $3 million dollars in Mbare along Simon Mazorodze road. It appears that the development was a build, operate and transfer (BOT) arrangement with a Lebanese company and although it was supposed to be opened/launched in June 2016, the market is still not yet functional. The reason is highly likely due to failure to attract tenants given another recent failure of the Mbudzi Mall due to low occupation rates. The Mbudzi Mall was developed by the controversial Augur Investments of the airport road saga. These out-of-town malls will most likely not be successful because vendors and SMEs who HCC is targeting as potential tenants rely on foot traffic for their business and high foot traffic can only be found in the central business district (CBD). Therefore, convincing vendors and SMEs to move out-of-town will be a mammoth task for the HCC. If done, however, this will de-congest the streets of Harare from street vendors and also increase revenues to the HCC which will hopefully be channeled towards better service delivery.
Old Mutual announced in June 2016 plans to build an SME centre across Robert Mugabe Road from Eastgate Mall to be known as Eastgate Market. The market will boast 500 trading bays, offices and a light manufacturing section with a total of 15,000 sqm under management. This project is expected to be complete by December 2017. This initiative will most likely pay off for Old Mutual as the location of the mall is ideal; close to the ever busy 4th street terminus. Old Mutual will however, have to get their pricing right and put flexible requirements for occupation, given that Old Mutual is known for its relatively high rentals and stringent demands.
These initiatives are meant to tap into the 20,000 strong vendors in Harare according to the National Vendors Union of Zimbabwe and more than 2,000 SMEs in the register of SME Association of Zimbabwe. Zimbabwe has become an SME economy with government trying hard to try and tap into that sector of the economy for tax revenues through presumptive tax and other measures. However, from a government perspective, it remains a difficult sector to manage and obtain adequate statistics to aide any assistance given that the SME/vending community contributes less than 1% in presumption tax and is notorious for smuggling foreign products without paying adequate (if any) taxes. More engagements are required between the government and SME/vending sector to come up with more win-win scenarios.