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Business Reporter

Improved occupancies during 2019 helped boost First Mutual Properties’ numbers during that financial year, despite a generally difficult operating environment.

Inflationary pressures and a depreciating currency, have been a cause for concern for most businesses during the period under review.

The group recorded an 88 percent rise in operating profit, which management attributed to “improved occupancy levels and turnover rentals.”

The value of the investment property portfolio grew by 53 percent driven by fair value gains.

Rental income was, however, down 12 percent to $57,42 million, from $65,25 million in the prior comparable period “underpinned by foreign currency translations effect,” said management.

New lettings improved occupancy levels to 85,70 percent, compared to 76,10 percent last year.

Property expenses, at $14,04 million, were down by 11 percent in line with drop in revenue.

However, the business maintained its strategic focus of investing in maintenance programmes to improve the quality of space aimed at attracting new tenants and retaining existing ones.

Net property income marginally decreased by 13 percent to $43,31 million from $49,65 million last year due to decrease in rentals.

Management said administration expenses declined by 29 percent to $20,72 million in 2019 from $29,40 million in prior year largely due to cost containment measures implemented by the business.

First Mutual Properties said a property valuation exercise during the year saw the portfolio being upgraded.

“An independent property valuation conducted by Knight Frank Zimbabwe as at 31 December 2019 valued the property portfolio at $1,392 billion, being a 53 percent gain on the prior year, on a market value basis,” said the group.

“The gain was driven by fair value gains of $485 million which were realised across the sectors.

“The group’s strategic land bank contributed significantly to the appreciation in value of property portfolio.”

In respect of new projects, First Mutual Properties said the Arundel Office Park extension project is at pre-construction stage with formal appointments of the design team having been concluded.

“In preparation of the project, some pre purchases of bulk materials have commenced.

“The construction work is set to commence in H2, 2020,” said the group.