By Alois Vinga
DESPITE the obtaining economic challenges, property firm Mashonaland Holdings has managed to post a 21 % rental income increase on the strength of timely rental increases.
In a trading update, the group’s company secretary, Batanai Peresuh said the segment’s income surpasses revenue generated during a similar period last year.
“Rental income increased by 21% to ZWL$77.71 million compared to the same period in the prior year. The uplift was mainly due to the quarterly reviews that were implemented from February 2019 and continued into the current financial year,” said Peresuh.
The firm partly attributed the revenue increases on new lettings which had a positive impact on the rental income growth for the quarter ended 30 June 2020.
“Rent reviews were however temporarily suspended for the period May to June 2020 in a bid to assist tenants during the lockdown period, notwithstanding the runaway inflation,” said Peresuh.
Despite the impact of the Coid19 pandemic, the group said occupancy levels as at 30 June 2020 increased by 3% to 79.2% compared to the same period in the prior year.
The Group has continued implementation of cost containment efforts and this has led to a reduction in expense to revenue ratios as follows: Property expenses to revenue ratio for the quarter was 16% compared to 18% achieved during the same period last year.
Administrative expenses to revenue ratio for the quarter ended 30 June 2020 was 26% compared to 27% achieved in the previous year.
However, the group admitted that tenants’ rent paying capacity has been negatively affected by the COVID-19 related restrictions which in turn has affected the inflation-hedging attribute of real estate investments in the Zimbabwean market.
Property expenses to revenue ratio for the quarter was 16% compared to 18% achieved during the same period last year.
During the quarter, the Group spent ZWL$10.6 million on property development projects. This outlay covered the pre-purchase of materials and professional fees towards the construction of the 25-cluster houses in Bluffhill, set to commence in the third quarter of 2020.