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Michael Tome  Business Reporter

Mashonaland Holdings is nearing completion of the first phase of the MashView Gardens cluster housing development projects and expects to complete the two remaining phases in the second quarter of 2023.

Located in Harare’s Bluffhill suburb, the US$3,6 million project was launched at the height of the Covid-19 pandemic in June 2021.

MashView Gardens is one of the key projects being undertaken by the listed property development company, along with Milton Park Day Hospital Medical facility and Pomona Wholesale Centre.

Mashonaland Holdings said all 25 units of the completed cluster houses were sold out prior to development.

The MashView Gardens project is now 87 percent complete with notable progress having been made in the construction of the boundary wall, gatehouse and electrification.

“The project delivered a healthy developer’s profit margin through cost containment measures,” said Mashonaland Holdings chief executive officer, Mr Gibson Mapfidza during an analyst briefing recently.

Mashonaland Holdings recently highlighted the need to maintain focus on portfolio optimisation and diversification to cut losses associated with the concentration of office properties in the central business district (CBD).

This comes at a time when the company is witnessing growing demand in the retail sector properties, particularly those located in strategic spaces.

“We continue to witness corporate exits from the CBD, but demand for retail space remains steady,” said Mr Mapfidza.

The real estate investment and development company is targeting a more balanced portfolio at the end of its portfolio diversification programme, which is currently underway.

Mashonaland Holdings portfolio structure is currently dominated by office space at 55 percent followed by Industrials at 12 percent, retail at 7 percent and residential and health comprise 8 percent.

However, going ahead Mashonaland Holdings intends to come up with a new portfolio structure to reduce CBD office space to 29 percent followed by office parks, a segment which is earmarked to constitute 23 percent followed by retail at 18 percent and tourism and industrial properties at 10 percent.

In terms of performance for the year to December, 2022, the group recorded a 98 percent growth in revenue in inflation-adjusted terms to $3 billion from $1, 9 billion realised in the same prior year period.

This was attributable to revenue earned from the MashView Gardens cluster housing development, which amounted to $1, 2 billion, a 30 percent contribution to the total revenue performance.

Rental income grew by 34 percent to $2,6 billion, contributing significantly to improved revenue performance in the period.

The increase in rental income was driven by periodic rent reviews which were designed to align rentals with obtaining market conditions as well as improved occupancy which grew to 87 percent in December 2022 from 81 percent in 2021.

Operating profit before fair value adjustments grew by 243 percent to $3,5 billion due to foreign exchange gains of $3 billion realised on foreign currency balances on hand following the disposal of Charter House.

The group sold the Charter House building at a cost of US$7,4 million, as it sought to strengthen its diversification thrust.

Group profit for the year under review was $17, 2 billion against a loss of $4, 8 billion recorded in 2021.

The buoyant performance is attributable to improved profitability and 39 percent capital gain recorded on investment  properties.