Business
Developers turn to subleasing amid narrow buying options within CBD
Zambia continues to attract massive investments across
Picture: Zambian Business Times
Zambia continues to attract massive investments across key sectors such as mining, agriculture, manufacturing, retail and real estate.
At the height of development, for many developers, access to land is a tedious process. Interestingly, purchasing land in the CBD is even more limited; this is because prime urban land prices in and around Lusaka have surged dramatically due to intense competition among corporate, retail, and real estate investors.
At the same time, the process of verifying records, transferring ownership, and securing consent from the Ministry of Lands and Deeds Registry involves tedious, bureaucratic procedures. Hence developers are exploring leasehold arrangements as an alternative.
Speaking in an interview with the Zambian Business Times – ZBT, Knight Frank Assistant Valuation Surveyor Natasha Chomba observed that leasing has become an important option for developers who encounter challenges in purchasing land or who simply prefer not to commit large amounts of capital to land acquisition in the CBD.
Finding and purchasing prime land outright in the Central Business District (CBD) of cities like Lusaka or Ndola is incredibly difficult and expensive. Long-term sub-leasing can be a very popular workaround. She revealed that sub-leased land usually provides investors with an opportunity to carry out developments without necessarily acquiring permanent ownership of the land. Depending on the agreement, developers can negotiate the duration of the lease, annual payments, and the terms governing the development.
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“There is an option of lease for developers if they come across land that is hard to buy or they just don’t want to buy, depending on the type of development,” Chomba said.
She explained that leasehold arrangements can be particularly suitable for certain commercial and retail developments where investors may prefer to negotiate long-term access to strategically located land rather than purchase it outright.
“For instance, it might be about a retail development where they say the leasehold will be for 20 years, and then terms are agreed on an annual subscription,” she said. Chomba cited East Park shopping malls as an example of a development where a leasing arrangement was used through a Public-Private Partnership.
Meanwhile, Chomba commended the introduction of the Zambia Integrated Land Administration System (ZILAS), which provides online access to information for the Ministry of Lands. She however expressed concern over the reliability of the system, noting that it can sometimes be intermittently unavailable. She called for improvements to the system to ensure that property professionals, investors and members of the public can access relevant land information more efficiently.
“There is need to hasten the process it would make life so much easier for industry players, people that want to do due diligence in verifying property history and information before initiating transactions for the property,” she emphasized.
Article by Samuel Mutale
Source: Zambian Business Times — Read more
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