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Malawi Real Estate Market Snapshot 2013

Office Market 

The office rental market remained relatively resilient during 2012, despite dramatic political and economic developments in Malawi. However, the currency devaluation in May 2012 negatively affected new office development and also triggered landlords’ demands for rental increases, particularly for rents that are not linked to the US Dollar. Conversely, landlords with Dollar-linked rents saw a huge jump in rents and the subsequent free fall of the exchange rate has meant that rents have been constantly changing in local currency terms. The Blantyre market continues to struggle with excess vacant space while there is unsatisfied demand for office accommodation in Lilongwe. The extreme uncertainty in the Malawian economy in 2012 led to high demand for property from investors seeking to channel excess liquidity into safe investments, pushing yields down to low levels.

Retail Market

Retail business in Malawi is dominated by imported merchandise and has therefore been greatly affected by foreign exchange shortages. So far, the retail rental market has been resilient but there are indications that activity will soon begin to slow as consumers’ purchasing power continues to be eroded by the high inflation caused by the devaluation and the free fall of the exchange rate. The construction of Gateway Mall in Lilongwe, which will be the largest shopping centre in Malawi, has been delayed by the recent economic uncertainty, and its opening date has been shifted from February 2012, as originally planned, to sometime in 2013. The cost of the centre was initially estimated at K6 billion (c.US$20 million), but is likely to double by the time construction is completed.

Industrial Market

In addition to the shortage of foreign reserves, the industrial sector continues to face serious challenges in the form of electricity blackouts leading to below-capacity production. These factors have led to retrenchments and the closure of some businesses. The current reduced level of industrial activity is reflected in weaker demand for industrial property, leading to stagnation in rental levels and property values. Future developments in the sector are uncertain, as the effects of recent economic reforms aimed at boosting local industry are still unfolding, but the expectation is that these reforms should boost demand for logistics and warehouse properties

Residential Market

The residential market has suffered from the effects of the chaotic economic situation. Demand has fallen in both the rental and sales markets, particularly in Blantyre. The Lilongwe market continues to benefit from the existence of a large ex-pat community, which has traditionally influenced the linking of rents to the US Dollar. There has been considerable recent activity in the upgrading and modernising of older buildings in good locations to meet ex-pat demand for high quality residential properties.

Written by: Knight Frank

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9 COMMENTS

  1. Real estate transactions often involve significant capital, so it’s crucial to establish a strong financial foundation. Maintain a good credit score, save for a substantial down payment, and explore financing options that align with your goals. VA Loan Realtor Bremerton WA

  2. certifications like LEED (Leadership in Energy and Environmental Design) are becoming more prevalent. Investing in sustainable properties not only aligns with environmental values but can also lead to long-term cost savings. homers.ng

  3. The real estate industry is a dynamic sector that mirrors the ebbs and flows of economic, social, and technological landscapes. In recent years, it has undergone significant transformations, driven by shifting demographics Industrial Real Estate

  4. In 2013, Malawi’s real estate market witnessed growth amid economic challenges. Urban centers saw increased demand for residential and commercial properties, spurred by population growth and infrastructure development. Despite fluctuations, the market exhibited resilience, reflecting potential for future expansion and investment opportunities. Zepto

  5. The traditional notions of living and working are undergoing a paradigm shift, giving rise to co-living and co-working spaces. These communal environments cater to the growing demand for flexibility, affordability, and community-driven experiences. Investors are capitalizing on this trend by transforming properties into shared living and working spaces, offering tenants a blend of convenience, connectivity, and collaboration. Warehouse

  6. In 2013, Malawi’s real estate market witnessed steady growth fueled by increased demand for residential and commercial properties. Infrastructure development and urbanization were key drivers, attracting both local and foreign investors. Despite challenges, the market displayed resilience, offering opportunities for expansion and investment diversification. Tiger Slot

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