By Alois Vinga
,LISTED property investment firm Mashonaland Holdings Limited (MHL), hinges the property sector recovery prospects on the anticipated economic recovery growth prospects expected this year.
Presenting a trading update for the twelve months ended September 30, 2021, MHL company secretary, Egnes Mhaka expressed hope that the real estate is set to recover on the back of economic growth.
“The government of Zimbabwe has forecast that the economy will, in spite of the headwinds, record a growth of 7.8% for the year 2021,” she said.
“The positive economic growth projections are anticipated to contribute towards improved demand in the real estate occupier market. The company remains focussed on its strategic priorities which include portfolio diversification and portfolio optimisation to sustain overall business performance.”
The remarks come when the property market remained susceptible to low demand for space, particularly in Harare’s central business district office sector due to low economic activity.
The market has, however, recorded improvements in occupancies for the retail sector as the economy mirrors its retail concentration during the period.
The industrial sector remained resilient with average yields of 8% across the market as well as occupancies above 90%.
“On the supply side of the property market, the dominant sector has been the residential sub-sector, which continues to attract new development activity due to the high demand for residential space and also the low risk given the sizes of residential units,” Madhaka said.
During the review period, revenue increased by 37% compared to the same period last year, driven by periodic rent reviews which the business has been performing in line with market practice.
The improved revenue performance was also driven by new leases concluded with occupancy levels have increased by 2% from 79, 2% to 80, 6%.
Operating profit increased by 18% due to the revenue growth, but decreased by 14% following an increase in total operating expenses.
“Increase in operating expenses was driven by movement in unofficial market exchange rates, which had a bearing on the Zimbabwe dollar value of maintenance materials and services consumed by the company,” Madhaka added.