Listed property firm Mashonaland Holdings Limited says it has made progress on the development of two residential projects in Ruwa and Harare during the six months to March 31, 2018, as it taps into the growing demand for residential properties.
Chairman Ron Mutandagayi said the firm was working on 48 residential stands, 24 in Old Windsor Park (Ruwa) and the balance in Bluffhill, Harare.
The Bluffhill project will be developed into cluster houses.
“The company embarked on the servicing of 24 stands in Old Windsor Park, Ruwa in the period under review. Work, which commenced in March is almost complete.
“The stands will be disposed in line with market conditions. Your company has also progressed on the development of another 24 residential units, being cluster houses on one of its stands in Bluffhill,” said Mutandagayi.
Meanwhile, there were no major tenant movements in the period under review and property valuations held.
This was mainly on the back of positive sentiments and expectations about the country rather than actual improvement of market fundamentals.
Resultantly, occupancy levels marginally declined to 71 percent compared to 72 percent during the same period last year.
Revenue for the half year period declined by a marginal 2 percent to $2,35 million on the back of stability in occupancy levels while there were no major rent reviews.
Property expenses came in at $0,63 million which was 15 percent below same period last year while the expense to income ratio also declined to 26 percent from 40 percent. Voids related costs remained the major item in this spent constituting 44 percent in the period.
The Central Business District (CBD) has remained problematic not only for Mashonaland Holdings, but across the local property sector as tenants opt for office parks or residential properties. Although tenants still struggled to pay rentals, inquiries from prospective new tenants increased in the six months under review compared to the same period last year.
“Expectations of better prospects have increased inquiries for business space and exploration of projects. There is renewed interest from foreign investors some of whom are eyeing participating in the local property market either directly or through portfolio investments,” said Mr Mutandagayi.
He added the firm was working on a review of its projects on its land banks to take advantage of the opportunities that may arise while also ensuring proper timing of execution.
But management remains upbeat about the medium to long term potential of the property market and will adapt its strategies in line with market trends.
Equity Axis is an online financial media service platform focused on African markets offering real-time stock quotes, news, analysis and data.