Shares of property companies stagnated on Malawi Stock Exchange (MSE) in the first half, a development market analysts say points to a shift towards short-term investment.
According to market data, share prices of both Icon Properties plc and Mpico plc remained stagnant between January and June 2025 with the former moving by 87 tambala from K17.93 to K18.03 while the latter dipped from K19.51 to K18.53.
Speaking in an interview on Tuesday, property management firm Knight Frank managing director Desmond Namangale said the presence of informal markets presents unique challenges and opportunities for developers and investors.
“The upturn and downturn on the performance fronts is due to investors’ preference on the market. Recently, there have been options on the investment vehicles many preferring to invest in stock markets/money markets/shares unlike real estate due to gestation period real estate takes to mature,” he said.
Namangale, however, said looking ahead, the prospects remain high as real estate remains the best lifetime investment as it hedges against inflation.
In a separate interview, Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa said investors are shifting their focus to more profitable sectors, particularly the banking industry.
“This sectoral preference reflects investor appetite for quicker and more stable returns, unlike the property sector which is currently weighed down by high construction costs, weak rental yields, and limited capital gains,” he said.
Makwakwa has however said listed property shares have the potential to improve if certain changes take place.
“As the economy strengthens and construction costs fall, investor interest in listed property companies may rise. If these companies start showing better profits, their share prices could go up,” he said.
On the other hand, Icon Properties plc board chairperson Eric Chapola said they are pleased with capital gains realised since the initial public offer while highlighting that the MSE market valuations do not immediately reflect fundamentals or financial performance of listed property firms.
He said: “Factors such as market liquidity, investor sentiment, and general trading activity heavily influence short-term price movements.
“Therefore, while Icon share price has shown marginal movement, this does not fully capture the intrinsic value being created or the company’s growth trajectory.”
Chapola said the company is pursuing several strategic projects that will enhance long-term value for shareholders, “and we are confident that, in time, the market will better recognize this progress”.
Although the share values the leading real estate listed firms remained stagnant in the first half, the two companies expect a significant profit growth half according to their trading statements.
