A Schematic Analysis Of Commercial Space Sub- Markets Competitiveness In Developing Countries: A Case Of Dar Es Salaam City

The Dar es Salaam’s commercial property market dynamics is not only the most vibrant market in the country, but also face a varied set of challenges that are complex and diverse. The various components comprising the city's commercial space perform differently, in some cases influencing each other and in others exacerbating the success or failures of government policy. In most cases there is limited published data available on the profile of market activity, size and performance at the regional level. However, it is very difficult to find information on comparatively competitiveness of office submarkets within the city, and more importantly, there is relatively little data available on key aspects of how these submarkets perform and influence each other. Drawing upon quantitative evidence, the current research explores trends in commercial property market size, activity, and performance on asegmented basis, highlighting submarkets’ competitiveness and how they influence each other and affect other property types in the city using a sample of 50 prime commercial properties selected randomly over 10 years period from 2008 to 2018. Overall, the DSM’s commercial property markets are interlinked and are affected with the general market shocks albeit with varying magnitudes. Within the same commercial node, even property types are affected in a linear manner. Further, commercial markets have shown a moderate and steady growth from 2008 to 2016, but a sharp decline in the recent years, with a fall in average property values (transaction prices) ranging from 5 to 7 percent every year. Nonetheless, properties with a high-class tenant mix show resilience to market shocks. The findings of this study are significant in explaining the nature of submarket competitiveness which is vital for developers; investment analysts and investors in strategic portfolio allocation and diversification and risk management strategies. The government can also use these insights not only to identify the strengths of the one segment to support the growth of the other, but also options for maximizing performance.