First Mutual Properties profit up 140 pct

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    Harare – First Mutual Properties, a subsidiary of First Mutual Holdings recorded a massive jump in profit by 139.57 percent for the year ended 31 December 2018 to $4.1 million from $1.7 million in the prior year driven by an improvement in occupancy levels.

    Occupancy levels for the period increased by 5 percent to 76.10 percent from 70.94 percent realised in 2017.

    In a statement accompanying the Group’s financial results, Group Chairman Elisha Moyo said that retail assets were the exception in terms of high occupancy levels as other sectors remained subdued to poor macroeconomic challenges.

    “In 2018, the Zimbabwean property market remained subdued, typified by available space supply exceeding demand and the resultant low investment in commercial developments in the market,” said Moyo.

    He said this led to limited uptake of space particularly in the Central Business District (CBD) where occupancy levels continued to decline.

    Revenue for the period increased by 9 percent to US$8.1 million from US$7.4 million achieved in 2017.

    Rental income increased by 8.86 percent to US$8.014 million from US$7.362 million achieved in 2017 mainly driven by new lettings which triggered a jump in occupancy levels.

    Property expenses increased by 24.93 percent for the year to US$1.988 million driven by investment in maintenance programmes to improve the quality of space aimed at attracting new tenants and retaining existing ones.

    “Net property income marginally fell by 2.03% to US$6.034 million from US$6.159 million in 2017 due to on-going investment in maintaining the infrastructure,” said Moyo.

    Administration expenses for the period rose by 27.71 percent to US$3.590 million in 2018 from US$2.815 in the prior year largely reflecting cost inflation.

    On the outlook, Moyo highlighted that rental rates are expected to rise “in the short term” as property investors seek to maintain real rental values in the face of rising inflation.

    -Equity Axis News

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