Property investment under an economic structural adjustment programme : the case of the Harare Central Business District office development
In Zimbabwe, the Economic Structural Adjustment Programme (ESAP) was introduced in 1991, at which time, intense office development activities started in the Harare City Centre. The fundamental aim of this study, therefore, was to identify and explain the driving forces behind office development activities in the Harare City Centre during ESAP (1991-5). Effort was made to reveal the effects of ESAP on the office development process. Three hypotheses from neo-classical (supply and demand), Marxist structuralism (circuits of capital) and structuration (structure and agency) perspectives were proposed to identify and explain the forces driving office development in the Harare City Centre during ESAP. Twenty-four development sites formed the population of properties identified for the study, of which six were selected for detailed examination. This research established that during the early phases of ESAP, demand for office space was fairly robust. With further property development, full occupation of the new space could be achieved only through tenant relocations and 'sweetheart' deals to seduce tenants into occupying new offices. Direct foreign participation in the Harare office development was not significant at all. That was mainly due to a combination of prohibitive legislation relating to foreign investment in property, and the failure of Zimbabwe to compete as an attractive investment destination for global capital. However, important structural changes such as planning policy and practice, reduction of the prescribed asset ratios of institutional investments, increases in inflation and so forth, were identified. Historically, institutional investors were underweight in property and, therefore, used the opportunity to select properties consistent with their long term objectives. It was concluded that the structure and agency approach presented an explanation of the Harare Office development superior to that of the other perspectives. Although ESAP facilitated the procurement of world class facilities and finishes, it had negative implications for the construction industry through high inflation, increases in building costs, the closure of firms and general economic decline.