Harare – Property investment holding company, Dawn Properties Limited said overall occupancy the six months ended 30 June 2019 was down 10% compared to the same period last year as a result of the prevailing subdued trading conditions.
Dawn’s operations are split into three units being investment property holding from which rental income is derived, property development and property consulting under Dawn Property Consultancy.
The majority of the investment property portfolio is in hotel properties which are leased to African Sun Limited.
Revenue for the period closed at ZWL$6.4 million which was an increase of 109% compared to ZWL$3.1 million in the same period last year.
Revenues from hotel property leases came in at ZWL$4.7 million compared to US$1.6 million for the same period in 2018.
“While there was a drop in international arrivals compared to last year, the growth of 2018 was attributed to the continued devaluation of the local currency which saw our foreign currency earnings being translated from 1:1 in January moving to 1:6 by end of June,” Group Chairperson Phibion Gwatidzo said.
The consultancy business recorded total revenue of ZWL$1.40 million compared to US$1 million in 2018.
Mr Gwatidzo said the business unit continues to be resilient despite a tough operating environment in the property management business driven by increased vacancies and downward pressure on rentals.
Operating expenses increased by 91% to ZWL$3.1 million compared to prior year.
“The major cost driver was increase in Staff Costs of 89% as the Group tried to cushion employees against a steep increase in costs of living,” Mr Gwatidzo said.
Looking at the property development sector, Mr Gwatidzo said the Group will launch its second housing project under Malbrough Sunset Views in the second half of the year.
The project consist of 354 residential stands measuring 2 000 square metres.
“Phase 1 of the development is expected to be completed by December 2019 and sales will commence in Q1,” he said.
On the outlook, the Group expects profitability for the remainder of the year to be driven by property development as it seeks to roll out more projects, good performance from timeshare rentals and an increase in rentals from Africa Sun across all properties.
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