As Zambia’s commercial real estate sector matures, 2025 presents a complex landscape for property owners and investors. The market is experiencing a confluence of structural shifts—ranging from declining rental rates to evolving tenant expectations and infrastructure demands. Understanding these dynamics is key to making informed investment and asset management decisions.
Rental Price Adjustments: A Market Reset
The withdrawal of USAID funding and broader macroeconomic pressures have contributed to a notable correction in rental prices across Lusaka and other urban centers. Average office rental rates have softened to approximately $13 per square meter, a significant drop from previous highs. This recalibration reflects both reduced demand and increased competition among landlords to attract and retain tenants.
Office Space Saturation and Changing Demand
The market is currently characterized by a high supply of available office space, particularly in areas such as Kabulonga, Ibex Hill, Mass Media, Longacres, Rhodes Park and nodes like Woodlands and Waterfalls. Listings show a wide range of options—from 150m² to over 1,000m²—yet the average tenant requirement has narrowed to between 150–250m², driven by leaner organizational footprints and hybrid work models.
This mismatch between supply and demand is prompting landlords to rethink space configurations, offer flexible leasing terms, and invest in tenant improvements to remain competitive.
Power Resilience as a Leasing Differentiator
With Zambia’s ongoing energy challenges, backup power solutions have become a critical factor in tenant decision-making. Properties equipped with reliable generators, solar systems, or hybrid setups are commanding greater interest and justifying premium positioning. For landlords, investing in energy resilience is no longer optional—it’s a strategic imperative.
Strategic Considerations for Owners and Investors
To navigate this evolving terrain, property stakeholders should consider:
- Repositioning assets to align with current demand bands (150–250m²)
- Incorporating power backup systems as a core feature, not a luxury
- Revisiting pricing models to reflect market realities while preserving long-term value
- Enhancing marketing narratives to highlight operational reliability, location advantages, and tenant-centric amenities
Final Thoughts
While the current market presents challenges, it also offers opportunities for agile, forward-thinking investors and landlords. By aligning offerings with tenant expectations and investing in operational resilience, stakeholders can not only weather the current cycle—but emerge stronger.
