• Zeco Holdings experiences another sluggish start to FY2025 with declining occupancy rates, despite shifting to real estate in 2022
  • The company has not recorded any profits for over 15 years, primarily due to management issues and national challenges
  • Shop occupancy rates drop to 46.67% from 69.57% year-over-year, attributed to “seasonality changes

Harare-Zeco Holdings, a perennial loss maker has seen yet another sluggish start to FY2025 with occupancy rate declining, despite a shift to real estate in 2022. Despite the sector offering solace to investors in an inflation-hit and decayed currency economy, ZECO stands out as the only company failing to capitalise on the booming real estate sector.

For over 15 years, the company hasn’t recorded any profit owing to a busload of factors, largely at company level especially regarding proper management, then exacerbated by national challenges.

In FY2024, the company managed to narrow its loss for the first time in a while, but profitability remains a dream, the company is yet to manifest.  Though the company anticipates recovery in real estate era from rail wagons era, this does not require just a pen and a paper but an overhaul from the company’s leadership to business focus.

With proper dots and metrics aligned, ZECO has the potential to taste the piece of the cake while its still on the table. Performance from its competitors within the same sector highlights ZECO’s incompetence to capitalise on a booming sector.

Back to Q1 FY2025 performance, shop occupancy rates dropped to 46.67%, from 69.57% in the same period last year attributed to “seasonality changes,’’ according to the company in a trading update, despite revenue increasing to ZWG16.72 million which was a substantial 2472% increase from the previous year's first-quarter revenue of ZWG0.65 million.

However, the company’s reasoning for the poor performance in occupancy absconds reasoning. According to the company this steep decline was due seasonality yet this rationale appears insufficient when compared to competitors like Tigere REIT and WestProp Holdings, which sustained a positive upward trajectory in Q1.

Though these companies differ slightly, as Westprop is into a mix of residential, commercial, and retail developments, Tigere focuses on housing projects, property investment and management, Just like ZECO, which emphasises property management and development, they all operate in the real estate and property development sector.

Zeco’s reference to seasonal factors, possibly tied to post-holiday retail slowdowns, is undermined by its competitors’ ability to maintain high occupancy, pointing to Zeco’s deeper issues such as poor management.

Tigere REIT sustained 100% occupancy in Q1 2025 across Highland Park Phase 1, Phase 2, and Chinamano Corner, driven by premium assets and 80% USD-based rentals that ensure tenant stability.

WestProp Holdings, with near-full sales in projects like Pomona City, implies high utilisation, fuelled by USD-denominated transactions and modern developments like The Hills Lifestyle Estate.

These firms’ success with high-quality assets and hard-currency revenues reveals Zeco’s occupancy decline as a result of internal weaknesses rather than seasonal trends.

In 2022, ZECO made a significant change in its business strategy by selling its rolling stock assets for US$4.5 million and shifting focus to real estate and property management.

This move aimed to improve ZECO's financial position and lay the groundwork for long-term growth. Following this divestment, the company reduced its FY2023 loss to ZWL3 billion, down from ZWL18.96 billion.

However,  nepotism and poor management continues haunting the company, leading to over 15 years without profitability.

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