Property concern Mashonaland Holdings hikes rentals to keep up with inflation

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    HARARE- Listed property concern Mashonaland Holdings has said it has adopted a periodic rental reviews for its entire property portfolio so as preserve value as well as generate an inflation beating return for its investors.

    The group has adopted a strategy to review rentals every 3 months which it says is in line with industry practice. “The reviews for the period May to July achieved a weighted average increase in rentals of approximately 62% from the previous rent reviews” said Mash in a trading update for the third quarter period to June 2019, to investors.

    In the previous quarter the company adjusted rentals by about 50%, highlighting increased pressure in the economy emanating from raging inflation and exchange rate losses.

    Annual inflation as at June which is the latest figures availed to the public, showed an outturn of 175% having begun the year at below 50%.

    The liberalisation of the exchange rate and the subsequent reintroduction of the Zimdollar coupled with diminishing local production capacity owing to forex and recapitalisation constraints has militated to weaken the value of the local currency.

    Mashonaland Holdings is arguably the largest property investments company operating in Zimbabwe. Within its property portfolio, Mash owns ZB Life Towers, ZB Center in first street Harare, Charter House, Houghton Park Shopping Centre, West End Clinic, ZB Centre Bulawayo, Mutare and Jet Stores among others.

    Its property portfolio is spread across Zimbabwe and is overweight on CBD office and retail. In the 3 months period to June 2019, Mash reported a revenue of $4.9 million up from $3.5 million in the same period last year a growth of 40%.

    Admin expenses however also rose in line with inflation, thus undercutting profit margins. Mash said it offered its employees hardship allowances adjustments as a result of inflation.
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