Zimre profits down as defaults rise

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ZIMRE Property Investments’ operating profit for the first five months to May was down 29 percent to $1 million compared to the same period last year, weighed down by declining incomes and rising defaults, managing director Edson Muvingi said on Wednesday.
Muvingi told shareholders and analysts attending the company’s annual general meeting that a slowdown in economic in activity has seen lower uptake of rental space, leading to the company’s total income declining by 22 percent.
“Vacant space is increasing because a number of tenants are actually closing business and this is not just a ZPI portfolio issue but it’s across the board,” Muvingi said.
Rental income declined to $1,542 million from $1,615 million in 2013 due to rising defaults and voids, while total administration costs decreased by seven percent to $749,000, Muvingi said.
He said project sales were down 38 percent to $906,000, marginally missing the budget target by two percent on the back of cash shortages in the economy.
Going forward, the company sees an improved uptake in residential stands in Masvingo and Bulawayo, boosting total income.
Commenting on the proposed $5,6 million Zimre Park extension project, Muvingi said the company is expecting to realize $1,3 million in profit if the project get regulatory approval.
He said a total of 220 stands out of the 288 had been sold under the Tynwald development project in Harare.Advertisement