Property – Construction & Engineering · Editorial

By Moakanyi Magazine · Global Issue · June 2026

An office tower is a long-dated bet on the economy made in concrete, and the bet is hardest to place when the outlook keeps shifting. The World Bank has cut its global growth outlook to 2.5% and warned of a drop toward 1.3% if war fallout spreads. That uncertainty reaches Gaborone's central business district through the leasing decisions of tenants who cannot plan far ahead.

When firms are unsure of their own trajectory, they hesitate to sign long, fixed commitments. For office landlords, the sensible response to macro uncertainty is not to wait for clarity that may never arrive, but to lease in a way that absorbs it. The building has to be designed and let for a range of futures, not a single confident one.

Why uncertainty rewrites the lease

In a confident economy, tenants sign long leases for large, fixed footprints. In an uncertain one, they want shorter terms, expansion and contraction rights, and space they can adjust as conditions change. A landlord holding only rigid, long-form leases may find them empty if tenants fail rather than renew, leaving the asset with no income and a costly re-letting ahead.

Flexibility is not a concession; it is a way of keeping the building occupied through a period when commitment is scarce. A shorter lease that is honoured is worth more than a long one that is broken, and a tenant given room to adjust is more likely to stay than one locked into space it has outgrown or can no longer afford.

In an uncertain economy, flexibility is the rent-collecting strategy.

The CBD vacancy problem

Gaborone's newer office stock already competes for a finite pool of tenants. A weaker global outlook tightens that pool further, raising the risk that prime space sits vacant while debt and rates continue to fall due. Flexible leasing, fit-out incentives and managed or serviced floors help landlords keep buildings occupied when commitment is scarce, even if headline rents soften.

The arithmetic is simple but unforgiving. A floor let at a modest rent still covers costs and keeps the building alive; an empty floor at the asking price covers nothing and signals weakness to every prospective tenant who views the building. In a downturn, occupancy itself becomes a marketing asset.

An occupied floor at a modest rent beats an empty one at the asking price.

Designing buildings for a range of futures

The most resilient office assets are those that can be reconfigured: subdivided for smaller tenants, combined for larger ones, or partly converted to other uses as demand shifts. Building and leasing for a range of outcomes, rather than a single optimistic forecast, is how a landlord survives a macro shock without an empty tower draining the balance sheet.

This is a design decision as much as a leasing one. Floor plates, services and access that allow flexible subdivision give a landlord options precisely when options are valuable. Rigid, single-tenant design assumes a confidence the current outlook does not support.

A building that can change tenants easily can survive a forecast that changes.

Matching debt to the uncertainty

Flexible leasing only works if the financing behind the building can tolerate softer income for a stretch. A landlord geared as if every floor were let on a long lease at peak rent is exposed precisely when tenants turn cautious. Matching debt to a realistic, lower occupancy assumption is the financial counterpart to flexible leasing, and the two together are what keep an asset solvent through a downturn the World Bank has explicitly warned could deepen.

The discipline is to plan for the 1.3% case as well as the 2.5% one. An office asset structured to survive the weaker scenario will comfortably prosper in the stronger; one built only for the optimistic forecast has no margin if the conflict-driven risks the World Bank flagged actually materialise.

Gear the building for the forecast you fear, not the one you hope for.

Botswana cannot steer the World Bank's numbers, but its office landlords can decide how exposed they are to them. In a period of cut forecasts and conflict risk, flexible leasing converts macro uncertainty from a vacancy threat into a manageable variable, and keeps Gaborone's CBD working through a cycle that no one in the market controls.

Sources: Reuters