- Mashonaland Holdings reported a profit after tax of US$3.7 million in FY2024
- The decrease in profit is primarily attributed to a sharp reduction in fair value gains
- Revenue increased by 12% to US$7.04 million
Harare-Mashonaland Holdings Limited, a leading property investment and development firm listed on the Zimbabwe Stock Exchange (ZSE), has sustained profitability in FY2024, posting a profit after tax of US$3.7 million.
This figure, however, reflects a 9% decline from US$4.1 million in 2023, driven by a sharp reduction in fair value gains on its property portfolio.
Group Chairperson Eng Grace Bema attributed this dip to “lower volatility in the USD property market,” a shift from the high-volatility environment of prior years.
While the company’s successful project launches bolstered its bottom line, the stabilisation of Zimbabwe’s USD-based property market, coupled with macroeconomic headwinds revealed a complex interplay of resilience and adaptation in a transitioning economy.
The reduction in fair value gains was the primary drag on profitability.
In 2023, these gains reached US$1.871 million, but they plummeted to US$742,906 in 2024, a 60% drop.
Historically, Zimbabwe’s ZWL property market thrived on volatility, with hyperinflation and exchange rate fluctuations inflating valuations as properties adjusted to chaotic market conditions.
The introduction of the Zimbabwe Gold (ZiG) in April 2024, backed by gold and foreign reserves, marked a turning point.
Supported by tight monetary policies from the Reserve Bank of Zimbabwe (RBZ), the ZiG maintained a relatively stable exchange rate against the ZWL in 2023, particularly from April to September 2024.
This stability curbed the dramatic valuation spikes that once fuelled fair value gains, flattening property portfolio growth.
Despite this, Mashonaland Holdings offset the fair value decline with strong operational performance, driven by strategic project completions.
The Pomona Commercial Centre Development, finalised in Q4 2024, added 14,000 square meters of lettable space for wholesaling and warehousing, valued at US$12 million.
Milton Park Day Hospital Facility, completed and handed over in 2024 under a pre-leased, long-term agreement, began generating rental income in January.
The repurchase and refurbishment of Chiedza House SME retail facilities, 60 furnished offices with WiFi, telephony, and shared facilities enhanced the company’s small business offerings.
These projects reflect a commitment to diversification and value creation, shifting focus from volatile fair value gains to tangible revenue streams.
Revenue rose 12% to US$7.04 million, propelled by a 14% increase in rental income to US$5.6 million, while net property income climbed 17% to US$5.41 million.
Portfolio occupancy improved from 83% to 89%, reflecting successful rent reviews and tenant retention.
However, an El Niño-induced drought in 2024 slashed agricultural output and hydropower generation, raising operational costs for businesses and softening demand for commercial spaces, particularly in the central business district (CBD).
Looking forward, Mashonaland’s strategy to reduce CBD office space reliance (from 55%) in favour of office parks, retail, and industrial properties signals a proactive pivot.
The USD market’s stabilisation may limit fair value windfalls, but it fosters predictable rental income a trade-off the company is leveraging.
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