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Enacy Mapakame : Business Reporter

PROPERTY concern Zimre Property Investment (ZPI) plans to sell two of its high rise office buildings in Harare’s central business district as voids rose to 24 percent in the five months to May 2016. ZPI managing director Mr Edson Muvingi yesterday told The Herald Business on the sidelines of the company’s annual general meeting (AGM) that offers were on the table for Fidelity Life Towers and Zimre Centre in the capital. Offers have also been received for Zimre Centre in Masvingo.This will enable the company to invest into more profitable property businesses outside the CBD such as office parks and residential properties.

“We are prepared to dispose some of our CBD properties in order to reinvest our money in office parks in towns where we have secured space

“Offers have been received for Masvingo, Zimre Centre and Fidelity Life Towers.

“At the moment we are discussing and negotiating. Our view is that we can redeploy that money to other areas,” he said without giving value of the three properties as it would jeopardise negotiations.

Average portfolio void rate increased to 24 percent as at May 2016 on the back of the challenging operating environment.

The company has suffered subdued real estate demand and declines in rental revenue on tight liquidity challenges affecting the economy.

Resultantly, there has been a surge in voluntary lease surrenders together with forced evictions, although the company has put in place mechanisms to negotiate payment terms with tenants.

In some instances, tenants now make rental payments at the end of the month instead of the beginning.

“We have tried to relook at our tenants and negotiate our rentals, to reduce the level of increase, but where we do not see scope for keeping them (tenants), we remove them, it will be better to shut down the entire floor completely and move the few to fill up other floors,” said Mr Muvingi.

In the five months to May, rental income went down 9 percent to $1,368 million while stand sales increased 58 percent to $0,828 million compared to same period in the prior year.

Operating profit for the period under review was 25 percent firmer at $0,847 million while total income also increased 15 percent to $2,4 million.

Personal, other administration expenses and total admin costs reduced 7 percent to $0,509 million, 12 percent to $0,307 million and 9 percent to $0,817 million respectively.

By close of Tuesday trades on the local bourse, ZPI’s shares were at 0,86 cents.