Zimpapers Logo

Tinashe Makichi Business Reporter
Listed property developer, Pearl Properties has started soliciting for $35 million from international financiers in a debt to equity swap arrangement to fund the proposed construction of a bus interchange complex construction in Harare.

Pearl properties signed a joint venture agreement with City of Harare last year for the development of the bus interchange with the project scheduled for take off next year.

The joint venture will see City of Harare contribute land while Pearl Properties will contribute the funding for the development

Pearl properties managing director Mr Francis Nyambiri told the company’s analyst briefing last Thursday that no funding has been secured yet but efforts are underway to engage international financiers.

“We are working on securing funding and we are looking at a combination of debt and equity. It is likely going to be a combination of 60 percent debt and 40 percent equity.

“There are a number of alternatives that we are looking at and in most instances our first pot is for those that are prepared to go through an ECP agreement, that is, for those partners willing to do most of the construction of the project and at the same time unlock and leverage on their international background for us to be able to access debt at competitive rates,” said Mr Nyambiri.

On other property developments Mr Nyambiri said disposal of Kamfinsa Cluster Housing Development commenced in the first quarter of 2015 and eight sale offers have been accepted as at 30 June 2015.

He said the Group has established arrangements with financial institutions to assist potential home seekers with mortgage finance.

Mr Nyambiri said implementation of sustainable macro-economic policies to resuscitate key productive sectors remains the stimulus to growth, with investment in public infrastructure being a key driver in supporting productive sector growth.

He said to this end, growth in the property sector is positively correlated to the economic fundamentals that will stimulate growth, stability and security for investors, with the added access to competitive funding for property development and infrastructure being essential to growth in the real estate market.

Mr Nyambiri said the group will continue to implement cost reduction initiatives to ensure sustainable earnings as growth in revenue are likely to remain depressed.

He said the group will also seek opportunities to enter into tailored property development structures to enhance the value and long term sustainability of the property portfolio.