An Analysis on the Effects of Property Management on Commercial Property Values. A Case Study of Harare (2015-2022)

Abstract

This study relates to an analysis on the effects of property management on commercial property values using Harare as a case study. In Harare, many commercial buildings are not in good shape and some are depreciating as a result of poor maintenance and bad property management. The impact of property depreciation will be the disproportionate losses in terms of asset capital values of these properties. Such structures are a threat to the occupant’s life as they can collapse and kill individuals. Such properties have become properties of low standards as a result of bad property management and lack of maintenance. This study was aimed at determining the influence of property management on property values for commercial properties, investigating the perceptions of real estate agents relative to their relationship with landlords and tenants, evaluating factors which affect commercial property values in Zimbabwe, assessing the challenges that are faced by property managers in managing commercial properties and come up with measures to ensure proper management of properties. This study was guided by property rights theory, agency theory and valuation theory. This study applied the positivism research philosophy. In this study a cross sectional research design was used. The study also adopted both quantitative and qualitative research strategies. A sample of 234 registered valuers, registered estate agents and property owners from insurance companies and pension funds from organizations such as (NRZ, NASSA, FBC building society, NBS, Old mutual, Fidelity life assurance) were selected using convenient sampling technique. In this study it was noted that property management, increases and maintains the value of property. When a landlord is overly demanding, controlling, or harsh to his tenants, it might frustrate the tenants to the point that they may purposely cause damage to the property or default on their rent payments. Interest rates was regarded as a factor which affect commercial property value in Zimbabwe. Rising operational costs is a challenge that is faced by property managers in managing commercial properties. One of the measure to ensure proper management of properties which was recognised in this study is employing caretakers. According to the findings of the study, one more method to acquire property management mandates is to capitalize on leasing activities with a company. The vast majority of property managers who were questioned in this study emphasized the need of open communication between renters and property owners via property managers.

Keywords: property management, asset value, commercial property, landlord, real estate, interest rate, communication