Zimpapers Logo

Property Reporter
FIRST Mutual Properties (FMP), formerly Pearl Properties results for the half year to June 30, 2017 showed an 11 percent decline in revenue to $3,72 million on a slowdown in rental income due to softening demand. Management said during the first six months of the year, the property market had remained subdued owing to the tough operating environment.

Overall, the sector has been marred by low demand for space, increasing vacancy levels, defaults and downward rental reviews.

Rental income per square metre went down 6,96 percent to $6,85 while rental yield also softened to 6,34 percent from 7,08 percent during the same period in 2016.

Despite the tough operating environment, FMP registered an improved performance during the first half driven by its diversified property portfolio resulting in profit after tax improving to $800 000 compared to a loss of $1,19 million in the comparable period last year.

Rental income for the period under review softened 8,21 percent to $3,7 million compared to $4,03 million achieved during the same period in the prior year.

During the period under review, the company accomNSSA

has decided against renting out St Tropez residential flats which have been recently refurbishedmodated some rent reductions requests to maintain occupancy levels. Trade receivables grew to $3,289 million from $2,978 million in the same period last year as tenants continue to struggle to meet their lease obligations.

Net property income was 19 percent down to $2,773 million while net property income after expenses also went down 29 percent to $1,514 million on declining rentals and increased reinvestment into maintenance costs during the year.

Maintenance costs jumped 232 percent to $275 246 as the firm has been working towards improving the ambience of its properties to retain existing tenants and attract new tenants.

While not many changes are anticipated in the property sector in the near future management, however, remains upbeat on the back of continued efforts to grow portfolio by actively looking for new opportunities for acquisitions and pre-let developments.

The group has also indicated it will re-invest into existing income generating properties in order to maintain quality of buildings and ensure sustainable earnings through managing occupancy levels.

The company did not declare a dividend. Formerly Pearl Properties Limited, the firm re-branded to First Mutual Properties effective September 13, 2017 following approvals by shareholders for a name change.

This is part of the group’s strategy to migrate to a uniform brand under the First Mutual name.