PEARL Properties said Monday that rental income for the interim period ending June 30 2013 was US$4,5 million, six percent up from the US$4,2 million recorded over the same period last year
The Zimbabwe Stock Exchange listed company attributed the marginal improvement to a more stable economic environment over the period under review.
The company said rental per square metre increased to US$7,96 from US$7,42 as a result of a higher than expected contribution from the recently refurbished suburban rental shopping centre.
Rental yield eased to 8 percent from 8,2 percent a growth in property values at 8,9 percent exceeded rental income growth achieved.
Property expenses for the six months totalled US$0,65 million from US$0,66 million, representing a 13 percent decline compared to the compared to the comparative period in 2012.
“The group continues to monitor the level of general provision for credit losses, operating cost under-recoveries in order to timely provide for any tenant balances deemed irrecoverable and any under collections on recoveries,” said the company’s chairperson Elisha Moyo.
He added that net property income during the period under review was US$3,9 million from US$3,6. This was 8,4 percent higher relative to the comparative prior year period due to the growth registered in rental income and a decline in property expenses.
Administration expenses for the six months were US$,184 million from US$1,72 million, being 6,8 percent higher relative to the comparative period last year due to the increase in advertising expenses by 137,1 percent and group shared services by 47,6 percent.
Net property income after administration expenses stood at US$2 million from US$1,84 million while operating profit of US$2,39 million from US$2,07 million was 16,1 percent higher relative to the comparative period in 2012 after increases in administration expenses were offset by the 6,9 percent growth in revenue.
“Cash and cash equivalent was US$4,1 million from US$430 000. At December 2012 cash balances were US$2,25 million. The growth in cash holdings resulted from retention initiatives put in place in order to build the group’s capacity to deploy the funds into property investment opportunities being pursued,” said Moyo.
Going forward, Pearl Properties said realisation of local economy’s growth potential hinges on the creation of a predictable and sustainable macro-economic policy framework that encourages and supports capital formation in the various key sectors, including the real estate industry.Advertisement
“(The) board remains optimistic that the conclusion of the harmonized national elections on July 2013 provides an environment that all stakeholders must positively exploit in order to unlock the much needed economic growth and wealth creation across all the productive sectors,” said Moyo.
In the immediate term, activity in the property industry is expected to remain subdued with rental growth continuing to be adversely affected by increasing voids arising from space surrenders, evictions and completion of new property developments.
The group will continue to explore and evaluate new property development opportunities in selected sectors that offer prospects for growth in income and capital especially in the long term.