Mashhold sees 36pc uptick in USD revenue
PROPERTY firm Mashonaland Holdings Limited says revenue in US dollar terms for the quarter to September 30, 2023, improved by 36 percent to US$4,6 million from US$3,3 million during the same period last year on increase in space absorption and project sales.
According to the group, revenue earned from the Mashview Gardens project contributed 14 percent to the revenue performance for the period under review.
The growth in US dollar earnings contribution has averted the loss of value associated with Zimbabwe dollar rentals.
Operating profit improved by 42 percent to US$2,3 million driven by the improved revenue performance. Investment property increased by 6 percent in real terms due to capital expenditure incurred on ongoing property development projects. The operating environment remained challenging during the period under review, characterised by depressed demand.
“The economy continues to experience subdued consumer demand across major economic sectors due to subsisting inflationary pressures which have reduced consumer purchasing power,” said company secretary Egnes Madhaka in a trading update.
As for the property market, the occupier segment continues to witness sustained positive performance in the suburban retail sector supported by high occupancies and optimal yields in newly constructed neighbourhood malls.
The industrial sector has consistently outperformed traditional real estate sectors with occupancies averaging 95 percent.
“However, the sector remains affected by power supply challenges which have an impact on the tenant’s cost of occupancy,” said Ms Madhaka.
The Central Business District (CBD) office sector continues to struggle with high voids as occupants exit the CBD preferring suburban office locations.
The development market segment continues to be impacted by a mismatch between development costs and resultant open-market property values. This mismatch has been perpetuated by the increasing cost and shortage of critical materials in the market.
However, amidst a challenging economic landscape marked by subdued consumer demand and persistent inflationary pressures, the Reserve Bank of Zimbabwe (RBZ) however implemented interventions to stabilise exchange rates. The Government’s extension of the multi-currency regime until 2030, through Statutory Instrument 218 of 2023, aims to boost business confidence and facilitate lending support to key sectors.
In terms of property development projects, the group has a line-up of projects underway dotted across the capital Harare.
One of the projects is Milton Park Day Hospital Facility, which has now been completed and handed over to the tenant to commence tenant fit-outs. The development will start earning rentals under a long-term lease from January 2024 in line with the Agreement to Develop and Lease (ADL) concluded with the tenant.
Another project, the Pomona wholesale centre consists of wholesaling and flexible warehousing with 14,000 square metres of lettable space. The anchor tenant has been secured and 60 percent of the development has been successfully pre-leased. The project Construction works commenced in July 2023 with a target completion period of 18 months ending in the fourth quarter of 2024.
On the residential cluster, construction of the housing units under phases 1, 2 and 3 at Mashview Gardens was completed in third quarter of 2023. According to Madhaka, site clearance is underway to pave way for the handover of the units due end of November 2023 in line with the adjusted project programme.
The group is also catering for budding small to medium enterprises (SMEs) following the repurposing of Chiyedza House to create 32 SME retail shops. Renovation works were completed in Q3 2023, and tenants started operating in the month of October 2023, the facility is anticipated to achieve 100 percent occupancy in November 2023. The group expects to remain focused on implementing its portfolio diversification strategy which will enable sustainable growth and delivery of shareholder value.
“The group will continue to put in place measures to manage risks associated with new developments,” said Madhaka.