Malawi’s property market faces a potential downturn as aid withdrawal by development partners, including the United States government, leads to project closures and weakens demand for office space, industry stakeholders have warned.
Mpico Board Chairperson Edmund Hami revealed on Friday that the aid freeze is already reducing disposable incomes and could lead to widespread retail closures, despite the company maintaining a 92 percent occupancy rate.
The warning comes as Mpico forecasts a challenging outlook marked by high inflation and tight monetary policy, with the property sector already facing several headwinds.
Despite these concerns, Mpico reported strong performance in 2024, with rental income rising by 17 percent and profits increasing to K12.18 billion from K7 billion in 2023, driven by the high occupancy rate.
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“Our properties include retail, office and residential spaces. In all these areas, it is about people’s disposable income, so if traffic to our retail facilities falls, that could affect us because retailers may be forced to close,” Hami said.
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He acknowledged the residential gap but declined to commit to immediate intervention, saying that the company’s retail and office investments align with its long-term strategy.
Central Region Chairperson of the Minority Shareholders of Listed Companies, Purity Chitalo, praised Mpico’s “strategic direction”, saying the growth plans “excite shareholders” despite market uncertainties.
Originally established by the government to develop Lilongwe’s property sector as part of the capital city development strategy, Mpico has since been privatised and shifted its focus away from residential development, despite a severe housing shortage.
Hami disclosed that the company is exploring diversification into tourism and mining to align with broader investment strategies
