Conrad Mwanawashe Business Reporter
FALLING occupancy levels and downward rent reviews saw property holdings and management company Mashonaland Holdings Limited revenues since the financial year end in September fall 7 percent below last year to $1,9 million. Revenues were also 2 percent below budget, Mashonaland Holdings chief executive officer Mr Manfred Mahari told shareholders in trading update at the company’s annual general meeting last week.
Rentals in Zimbabwe have been under pressure due to the subdued economic activity in the country.
Voids have remained largely stable at 26 732 square metres since last September, representing 25 percent of the lettable portfolio.
Rental debtors grew by 20 percent to $2,3 million from the year end position of $1,9 million largely attributable to Government ministries and departments in the company’s portfolio.
To arrest further decline, new revenue streams are being actively pursued while the company will aim to retain good tenants through high quality service delivery and responsiveness to their needs.
“Strategies are in place to ensure that we attract any new quality tenants on the market,” said MR Mahari.
Mashonaland Holdings is expecting a yield of six percent from the OK Houghton Park with completion of the project on target.
“Additionally, completion of the project will free up the space being let to OK for further strategic re-letting,” said Mr Mahari.
Government has also been engaged with a view to reducing its arrears to the company.
Mr Mahari said consideration is being given to re-strategising the development of the Hazeldene residential project due to the persistent liquidity challenges and lack of affordable mortgage.
“We are actively considering alternative options for realising value on the Hazeldene landbank in the short-term. These options will be assessed against the long held housing development plan for which we have already obtained a permit,” he said.
The company’s property expenses were one percent up at $493 669 on last year and 11 percent above the current budget of $445 992.
The key drivers of these expenses are mainly voids related costs – at 40 percent; provision of credit losses – 23 percent – and property management costs -23 percent.
Administration expenses at $0,7 million were three percent up on the same period last year and 17 percent above budget.
Operating profit at $800 000 was 19 percent below both the same period last year and budget.
“Our revenue growth and cost containment strategies are set to improve our operating profit,” said Mr Mahari.
Mashonaland Holdings shareholders voted in favour of extending the company’s share buyback scheme by another year.