Pensions can build Zimbabwe’s future

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Leonita Mhishi

A RETIRED teacher in Mbare has spent decades contributing towards a pension, hoping for financial security in old age. Across Ha­rare, a young couple struggles to raise a deposit for their first home, while a small business owner searches for affordable commercial premises. Meanwhile, a developer with a viable housing project cannot secure sufficient long-term fi­nancing.

These may appear to be separate chal­lenges, but they share a common thread: Zimbabwe needs investment that con­nects its accumulated savings with prop­erty developments capable of creating jobs, providing homes and stimulating economic growth.

Could pension funds help bridge that gap?

The answer is yes. However, un­locking their potential requires more than directing money into construction. It demands sound investment decisions, accountable developers and a property market that delivers value to investors and ordinary Zimbabweans alike.

The opportunity is substantial. Ac­cording to the Insurance and Pensions Commission (IPEC), Zimbabwe’s pen­sion industry held assets worth US$3.47 billion as at June 30, 2026. Investment properties, including property units, were valued at US$1.33 billion, accounting for approximately 38 percent of total sector assets. These figures demonstrate the industry’s significant exposure to real estate and its potential influence on the country’s property market.

The challenge is to ensure that pen­sion capital supports productive develop­ments rather than simply accumulating land and buildings. For workers, the ulti­mate measure of success is not the num­ber of properties owned by their pension funds, but whether those investments generate sustainable returns and protect their retirement savings.

Pension funds are potentially well suited to real estate because retirement savings are accumulated over long pe­riods. Unlike investors seeking quick profits, these institutions can consider projects that take several years to devel­op and mature, provided returns justify the risks and sufficient liquidity remains available to meet pension obligations.

This creates opportunities across res­idential housing, commercial buildings, industrial parks, hospitality facilities, mixed-use developments and supporting infrastructure.

Housing deserves particular attention because it brings together a pressing so­cial need and a potentially viable invest­ment opportunity.

For many Zimbabweans, homeown­ership remains an aspiration rather than an achievable milestone. Construction costs, limited mortgage financing and incomes that struggle to match property prices have created substantial barriers. Pension-backed investment could help finance planned residential develop­ments, serviced stands and housing proj­ects designed around what households can realistically afford.

Imagine a development offering modest homes for teachers, nurses, civil servants and young professionals instead of concentrating exclusively on luxury properties. Pension funds could partner with reputable developers, mortgage lenders and local authorities to finance construction in phases, reducing the risk of committing substantial capital before demand is established.

Where financially viable, rent-to-own arrangements and mortgage partnerships could help qualifying households prog­ress towards ownership. Such schemes would require transparent contracts, real­istic affordability assessments and safe­guards against unaffordable debt.

The commercial case is equally im­portant. Housing that matches purchas­ing power could attract a broader market than developments dependent on a small pool of wealthy buyers. Nevertheless, pension funds cannot solve the housing crisis alone. Government must improve the policy environment, councils must provide serviced land, and developers must control costs.

Commercial real estate presents an­other opportunity. Businesses need ware­houses, offices, distribution centres and industrial premises to expand operations. Well-planned industrial parks could pro­vide reliable utilities, accessible transport links and professionally managed facili­ties for manufacturers, logistics operators and smaller enterprises.

For pension funds, rental income from multiple tenants could offer a dependable revenue stream. For busi­nesses, suitable premises could reduce the cost and complexity of establishing their own facilities. The wider econo­my would benefit through construction employment, supplier contracts and in­creased commercial activity.

Hospitality also deserves consider­ation. Victoria Falls and Zimbabwe’s wider tourism sector offer opportunities for hotels, conference facilities, serviced apartments and mixed-use develop­ments. However, investors must exam­ine occupancy rates, seasonal demand, operating costs and transport access be­fore committing funds. A hotel attracting insufficient guests cannot generate the in­come required to sustain an investment.

Real Estate Investment Trusts, com­monly known as REITs, offer another av­enue. These vehicles pool investor capital to acquire or develop income-generating properties. Zimbabwe’s stock market provides examples through Tigere REIT and Revitus Property Opportunities REIT, demonstrating that listed property investment structures already exist local­ly.

Professionally managed property companies and REITs can give pension funds exposure to real estate without re­quiring them to manage every building directly. They can also widen participa­tion in property investment, although li­quidity, valuations and market risks must be carefully assessed.

The opportunity extends to infra­structure. Roads, electricity, water, sew­erage and telecommunications determine whether a development becomes a func­tioning neighbourhood or an unfinished collection of buildings. Pension funds could participate in properly structured projects supporting serviced residential land, industrial parks and mixed-use communities, provided revenue sources and repayment arrangements are credi­ble.

Zimbabwe’s prescribed-asset frame­work offers another potential channel for directing institutional investment to­wards development priorities. The 2026 National Budget reported that pension funds faced a prescribed-asset require­ment of 20 percent, while compliance stood at 10.31 percent as at September 2025.

This gap highlights the opportunity to channel more institutional capital into approved development projects. Howev­er, prescribed-asset status should never be mistaken for proof that an investment is financially sound. Pensioners’ savings must not fund poorly planned ventures simply because they carry strategic im­portance.

The biggest obstacle may not be a shortage of capital alone, but a shortage of bankable projects. Developers need secure land titles, clear planning approv­als, transparent procurement, realistic budgets and credible demand assess­ments. Investors must conduct indepen­dent valuations and monitor projects throughout construction and operation.

Currency risk also requires careful management. Where construction costs, rental income and pension liabilities are denominated in different currencies, mis­matches can erode returns. Weak gover­nance, inflated valuations and excessive exposure to one property market could threaten retirement savings.

This is particularly important because pension funds already have substantial property exposure. The objective should therefore be to deploy capital more productively, not simply acquire more buildings. Diversification, independent oversight and transparent reporting must remain essential.

Ultimately, Zimbabwe should mea­sure pension-backed property invest­ment by more than buildings constructed or land acquired. Meaningful outcomes include affordable homes delivered, businesses accommodated, jobs created, infrastructure completed and sustainable income generated for pension beneficia­ries.

The teacher in Mbare deserves a pen­sion that preserves dignity. The young couple deserves a realistic route towards homeownership, while entrepreneurs need premises from which to grow.

These aspirations need not conflict with investors’ interests. With credible projects, professional management and disciplined risk assessment, pension funds can finance developments that deliver commercial returns and broader economic benefits.

Zimbabwe’s pension funds cannot solve every problem in the property mar­ket. However, they can become powerful partners in transforming it.

The real opportunity is not merely to build more property. It is to build a property market that works for investors, businesses and ordinary Zimbabweans alike.

l Mhishi is the Principal Registered Estate Agent at HSP REALTY and can be reached on +263 772 329 569 or via email at leonita@hsp.co.zw