• During the reporting period, the Zimbabwe economic environment remained fragile coupled with rapid depreciation of the local currency, retrogressive monetary measures and inflationary pressures. 
  • However, the Group rebounded from a loss of ZWL 392 million in 2021 to a profit of ZWL 1.6 billion. 
  • From January to June 2022, the ZWL depreciated by a significant 70% which is a record decline. 

Harare - Leading properties investing outfit, Mashonaland Holdings Limited says the low economic progress within the nation, coupled with weak monetary policies, inflationary pressures and shortages of the greenback to import key raw materials remain a major setback to the growth and prowess of the property market. 

In a statement accompanying the half-year financials for the half-year ended 30 June 2022, the Group’s chairperson, Grace Bema said the local calamities have been further exacerbated by the global headwinds courtesy of the Russia-Ukraine war which is inflating global commodity prices which are key for the property sectors’ development. 

“The property market remains hamstrung by lethargic demand across all sectors of the market owing to low economic activity in the economy, internal fiscal and monetary policy issues and global headwinds impacting the global supply chains,” Bema said in a statement. 

“In addition, the economy continues to be impacted by foreign currency shortages which have led to a continuation of exchange rate depreciation of the local currency both on the formal and parallel markets.”

State of the economy during reporting period. 

During the Group’s reporting period, from January 1 2022 to June 30 2022, the Zimbabwe economic environment remained fragile coupled with rapid depreciation of the local currency. In a period of six months, the local currency struggled to gain any ground against the much preferred United States dollar due to its lack of preserving value and lack of confidence from the market. 

From January to June 2022, the local currency continued heading southwards, depreciating by a significant 70% which was a record decline since the introduction of the Zimbabwe dollar in 2019.

During the same period, the anguishing local currency also registered a record decline of 33% in a day which is still a record daily decline even to date. On the parallel market, which mirrors the true reflection of the economy, the Zimbabwe dollar depreciated by circa 200% against the greenback as market forces pegged the exchange rate. 

The major spiker of exchange rate volatilities in the market was the shortage of foreign currency which is key for importing raw materials.

Despite promising to allow bidders on the auction market to bid the available funds, the government continued grappling with the clearing of backlogs on the Auction Market which amounted to US$169 by 11 August 2022 which the Central Bank promised to pay at an undefined time. 

As an alternative to reduce congestion on the US dollar, the government introduced gold coins on the 25th of July this year as a value preservation method. Gold coins have received a warm welcome so far from the market.

However, pressure for the greenback remains shooting as manifested by the highest bids put by the companies on the RBZ governed Auction Market for the US dollar against the Zimbabwe dollar which is running southwards at unprecedented level. 

On the fiscal and monetary policies side, a lot has happened during the reporting period, mainly hawkish monetary and fiscal policies to resuscitate the whole economy.

As the country grapples to counteract speculative borrowing and bring sanity within the banking sector, on 27 May 2022, President Emmerson Mnangagwa banned borrowing, a measure that barely lasted for seven days. However, the banking sector is critical for the survival of property markets that rides on banks’ credit lines. Besides that, hiking of bank policy rates to a record 200% is detrimental to productive borrowing, affecting booth customers’ power to purchase property and companies to invest. 

“The increase in lending rates albeit below inflation has significantly increased property development finance costs.”

“The high-interest rate on mortgage lending coupled with declining disposable income continue to act as hindrances against further growth in residential sector developments,” Bema said. 

Financial performance

The Group rebounded to profit-making after a headline loss recorded during the same half-year period in 2021.

Turnover shoot by 51% from ZWL 471 million to ZWL 709 million. Key revenue growth was attributed to periodic rent reviews and improved occupancy which grew from 79% to 83% during the review period. 

However, net property income as a percentage of revenue decreased from 83% to 78% due to increases in property expenses which increased by 98% driven by maintenance works which the Group continued to implement for continued quality of space to attract tenants as well as retain them. 

“Maintenance works were also carried out at Chiyedza House to support the growth of the flexible-leasing facility,” Bema added. 

Group’s operating profit increased by 204% from ZWL 800 million buoyed by partly foreign currency gains of ZWL 503 million which were realised on foreign currency balances held by the Group following receipt of deposits on the disposable of Charter House.

Resultantly, the Group rebounded from a loss of ZWL 392 million to a profit of ZWL 1.6 billion. 

The board declared a dividend of ZWL 141 782 393 OR 8.401 cents per share and it revealed that a separate dividend notice will be published to this effect.

Property development projects

Pomona deal

The Group completed the acquisition of the 4ha Pomona property during the first quarter of this year. Construction works are expected to start in October this year.


Mashview gardens

The Group is set to complete the construction work on the 1st phase of the Mashview Housing in August this year and works on phases 2 and 3 have already commenced. Completion of the project is targeted for the last quarter of 2022. 

12 Van Praagh Day Hospital Project

Construction works on the development commenced in the second quarter of this year and the project has a duration of 14 months targeting completion on 31 August of 2023. 
Windsor Park Ruwa residential stand sales. 

The Group agreed to sell 15 of the 24 fully serviced medium-density residential stands in Windsor Park, Ruwa. Bema said the funds raised from the disposal of these stands are anticipated to create further liquidity to support other strategic development works. 

On investment property, the Group performed an open market valuation of its investment properties and was valued at ZWL 32.5 billion, a 7% increase from ZWL 30.5 billion obtained in 2021 during the same period. 

“The increase was mainly due to aggregate fair value which amounted to ZWL 2.3 billion,” said Bema. 

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