land from major transport networks and other
infrastructure. But the Maputo Ringroad, a major
highway development expected to be concluded
mid next year, will open up vast tracts of land to
the north and north-west of the city, providing
enormous opportunities for large-scale low-cost
housing developments.
Mozambique´s housing deficit - which is estimated
at two million units according to Dr Amorim Pery,
Director of Planning and Control for Mozambique´s
state-owned Fund for Housing Promotion (FFH)
– is not isolated to Maputo. Emerging economic
centres such as the aforementioned Tete, Nampula
and Pemba are quickly developing housing shortages
too. Real Estate Consulting estimates the demand
in Nacala will grow by 4 475 units over the next five
years, and by 6 500 units in Pemba.
Retail
The retail sector across the country is also “still very
much incipient” according to real estate developer
José Carlos Pinheiro, CEO of Pylos Mozambique.
S p e a k i n g at t he Pa m G old i n g Prop er t ie s
Conference, Pinheiro said the current formal retail
market caters only to high-end consumers in the
Maputo area, while most retail sales take place
among inefficient informal vendors.
Prices remain uncharacteristica lly high in
the informal sector due to costly import and
transportation overheads, and climb higher still
in areas further north. This presents a potentially
lucrative business opportunity: if large retailers can
overcome high operational costs and offer competitive
prices, they will have the lion´s share of the market.
And there is huge demand for affordable brands in
cities outside of Maputo, which Pinheiro estimates
could hold between 20 and 30 shopping malls.
Challenges
While opportunities are high in Mozambique´s
www.reimag.co.za
booming property market, caveats remain. For
one, all land in the country is owned by the State, a
remaining stronghold of the government´s socialist
roots. Parties interested in “the right of use and
exploitation of land” must first obtain a DUAT
(Direito de Uso e Aproveitamento da Terra),
which gives authorisation to develop and operate
commercial activity for 50 years, after which time
the DUAT may be renewed.
The lack of private land ownership has also
exacerbated the countr y´s credit shortage, as
publicly-owned land cannot be used for collateral.
Interest rates are now hovering around 16%, but
this is a great improvement from rates upward of
20% just 12 months ago, following expansion in the
financial sector. In addition, foreign developers in
Mozambique will need to cope with the usual issue
of fluctuating exchange rates, which can lead to a
volatile cash inflow, even if revenue in meticais is
fairly stable.
Lucrative opportunities to be seized
Yet, as construction sites for modern high rises
line the streets of downtown Maputo, property
investors are clearly overcoming these challenges.
That they are doing so is a testament to the lucrative
opportunities in the country, many of which have yet
to be seized.
RESOURCES
Pam Golding Properties Mozambique
Offshore Handbook 2014
23