Types of Real Estate Investments in Zambia
Real estate investment in Zambia offers a wide range of options for potential investors, both local and international real estate investors. Here are the common types of real estate investments in Zambia.
1. Residential Real Estate Investment
One common real estate investment in Zambia currently is residential real estate investment. As an investor in residential real estate, you assess the market potential in your selected area or town of investment as the first thing. Once you have a good analysis of what town and neighbourhood to invest in, you will choose investment options available to you. As a residential real estate investor in Zambia, the common investments will be in townhouses, duplexes, triple-deckers, high-value homes, multi-generational home units and furnished units aimed at international tenants that prefer alternative accommodation to hotels. All these options provide the investor with a monthly payment of rent on the property or an outright purchase if flipping the property. Terms and conditions for the tenancy are put into a formal written rental or lease agreement signed by both the landlord/lady and tenant. In Zambia, the tenancy lease agreement usually lasts for 12 months and may be renewed or terminated according to provisions set out in the agreement. Professional advise from your go-to agent or broker will be helpful through the process.
2. Commercial Real Estate
A growing real estate investment option in Zambia’s urban centres is commercial real estate investment. These are primarily office buildings in urban centres and newly growing business districts. Available investment options common here include small buildings in which the property owner leases out to small business owners (SMEs) or bigger office complexes or high-rise buildings that can host several corporate tenants or Government departments. Other options include medical and educational buildings, hotels, inns and alike. The rent payable here is usually calculated on a per unit occupied basis, in Zambia, this will usually be on a per square-metre basis. The lease agreements for commercial real estate usually last several years and include several clauses to protect both the tenant’s and property owners’ interests. Commercial real estate also offers relatively higher return on investment in general than residential real estate, though residential real estate may offer a faster return than commercial real estate. Always a good idea to get expert advise before making your choice of investment.
3. Industrial Real Estate
Another growing trend in real estate investment in Zambia is investment in industrial real estate. This type of real estate is sometimes categorized under the commercial bracket though the specific category technically is industrial real estate. Under this falls real estate investments such as warehouses, storage units, factories, etc. These are usually long term if rented out and offer significant return on investment to the investor.
4. Retail Real Estate
This is another type of real estate investment commonly categorized under commercial real estate. Retail real estate investments include the growing shopping mall developments, retail shops or storefronts, multi-use buildings, etc. Typically, before setting out on such an investment, the property investor or developer looks for an anchor tenant (usually a big supermarket chain-store) that drives traffic to the property development because of its established brand. Rentals in this type of real estate investment usually include an extra income flow structure other than just the base rent agreed between the investor or property owner/manager and the tenant. This additional money is a percentage usually generated from sales by the retail stores.
5. Land Real Estate
Investment in land is usually a long term real estate investment option. This type of real estate investment includes investing in vacant land, farms or farm land, and ranches. Vacant land may further be sub-categorized into undeveloped, early development or reuse land, and plot subdivisions commonly re-sold as serviced plots.
6. Mixed-use Real Estate
This is basically some combination of all or some of the above listed real estate investments. Investors that take this investment option are looking to diversify their potential tenants. These developments will usually include an anchor tenant followed by key sector businesses in banking and finance, insurance, travel and tours, etc.