Malawi’s rental market has seen a rising demand for small office space while there has been a decrease in demand for larger offices, a property management firm has said.
In its 2017 Africa Report, Knight Frank has noted a general move towards modular office space that allows occupiers to downsize or increase space as the need arises.
According to the firm Lilongwe, in particular the city centre has a shortage of high quality office space and no construction has taken place in recent years as a lack of infrastructure inhibits the development of vacant sites in central areas.
Reads the report: “It is observed that five new office buildings are under construction and will be ready for occupation within two years, in parts of the city [Lilongwe] where infrastructure is in place. On the other hand, office development and sales in Blantyre are both at a standstill due to the high cost of finance.”
In recent times, small scale businesses operating in the country have voiced out concerns on the country’s lending rates, citing this as a stumbling block from borrowing from banks.
Indigenous Business Association of Malawi (IBAM) president Mike Mlombwa speaking to Business News recently said though the rates have been tamed, the country’s lending are still high as businesses think twice before they borrow from banks.
The report further points that though electricity blackouts and water shortages have worsened to the extent that industrial production is now estimated to be at less than 50 percent of its capacity, demand for warehouses continues to be relatively strong.
According to the report, this is dominated by industrial users requiring logistics and storage space while on the other hand warehousing rents have thus maintained comparatively high levels. Investment transactions in this sector are negligible.
On the retail market, the report observes that demand for high quality retail space is tapering off due to the low purchasing power of consumers.
Says the report: “The Gateway Mall in Lilongwe opened in December 2014 but it is not yet fully occupied. Lilongwe now has two large modern shopping malls and Blantyre has one, although several smaller malls have appeared in the past two years. Generally, the traditional high street retailers continue to thrive.”