Joina City occupancy down six percent

ONE of the country’s biggest shopping malls Joina City, owned by Masawara Plc, recorded a six percent decline in occupancies for the six months ended June 30, 2017. In a statement accompanying the company’s results released yesterday, management said the six percent decline in Joina’s occupancy was mainly driven by the unit’s decision to cancel the lease contracts of non performing tenants.

Occupancy levels for the shopping mall stood at 54 percent for the period under review from 60 percent prior year comparative. Occupancy rate refers to the ratio of leased space compared to the total amount of available space.

Tenants have also been struggling to pay rentals with debtors as a percentage of revenue increasing to 38 percent from 28 percent prior year comparative. Although the ratio of debtors as a percentage of revenue increased by 10 percent, this ratio is expected to improve as a result of the unit’s strategy which focuses on retaining performing tenants,” said Masawara.

Commenting on the risks and uncertainties that might affect the business, management said the principal risks and uncertainties affecting the business relate to the economic environment.

Office use outside the Harare CBD has been rocketing creating a mismatch between investment and demand.

In a property market update, Dawn Property Consultancy said there is an oversupply of office space in the CBD as a result of downsizing and closure of companies, re-location of companies from busy CBD’s and high service charges in the CBD in contrast to outlying areas.

“The office property market has continued to decline in occupancy levels due to increasing tenant evictions and voluntary space rationalisation leaving voids rate of approximately 60 percent,” said Dawn.

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