Covid-19 pushes property business to the edge

Players in property development and management business say if the Covid-19 pandemic prolongs, significant businesses will be lost as more people are working from home, with most property space being vacated.

In separate interviews, the players said this has continued to affect their business.

Damien Kafoteka, managing director of Mpico Limited, a Malawi Stock Exchange-listed property management firm, said on Tuesday that business is at its lowest ebb as the majority of tenants cannot pay rent owing to Covid-19 economic impact.

He said: “We rely on clients and if their businesses are suffering, we also suffer and we sympathise with them.

“This means a scale-down on our business and planned new investments.”

Kafoteka said the Covid-19 measures announced this week will also aggravate the situation as retailers such as shops, restaurants, bars and casinos will close shop or significantly scale-down in line with the measures.

On her part, Eris Properties Limited chief executive officer Ellen Chapinduka Nyasulu said in a written response that if Covid-19 prolongs, business performance will be affected and some players may close shop.

She said the pandemic is reducing the demand for office space, resulting in low revenue.

Said Nyasulu: “For those who were servicing mortgages, this may lead to default, ending up having their properties repossessed.

“Again businesses may end up having longer time working from home; hence, posing a risk of tenants giving up space, leading to high vacancy rate.”

On the flipside, she said less demand for property could lead to a drop in property, adding that it could be rewarding for those with money to invest in real estate now. 

On her part, Malawi Housing Corporation spokesperson Enestina Lunguzi said Covid-19 has affected revenue generation as collection of rentals and related enforcement programmes have slowed down.

She said: “The corporation has experienced low rent payment during this period for both house and plots with many tenants in rental arrears.”

Ministry of Finance spokesperson Williams Banda recently said government will not be providing stimulus packages to the private sector because of financial challenges as budget deficit continues to widen owing to Covid-19 pandemic which is affecting revenue collection.