The Sunday Mail
Africa Moyo – Business Reporter
SHORT-TERM insurer NicozDiamond Insurance Limited will inject more than US$4,5 million into housing in Harare as part of measures to unlock value in a highly volatile market.
The firm will self-finance its project.
An estimated 58 housing units will be constructed in Hatfield in two phases. Already, 20 units built under phase one are ready for occupation.
The second phase has started and is expected to be completed by April 30, 2015.
The houses are selling for an average price of US$105 000 each.
Most Zimbabwe Stock Exchange-listed counters are investing in the property sector for higher returns and to minimise risk.
Traditional investment markets such as fixed income securities and quoted equities are largely viewed as susceptible to local market shocks.
CFI Holdings announced recently that it would roll out 635 high-density housing units worth approximately US$15 million.
FBC and CBZ have also invested in property.
Apart from seeking to enhance shareholder value and impacting positively on their bottom lines, housing dovetails with Government’s plans to avail affordable accommodation to citizens under Zim-Asset.
NicozDiamond treasury boss Mr Joseph Mashika told The Sunday Mail Business that US$4,5 million had been invested in housing because infrastructure development was a key source of long-term funds in developed economies.
“In this regard we are just playing our part in a small way,” said Mr Mashika.
He explained that NicozDiamond was motivated to join the housing sector because of the need to maximise investment return from “our land bank by building houses as opposed to selling undeveloped land”.
“(There was also) the need to diversify rental income as the bulk of our rental earnings are currently from commercial properties since we intend to retain some units.”
Nicoz plans to invest in low-cost houses in order to cater for low-income earners who have borne the brunt of high property prices vis-a-vis their lean pockets. “We intend to develop high-density residential stands in the medium to long-term future, but this is a function of demand and profitability.
Other things being equal, we intend to embark on this initiative in 2016.”
Briefing analysts recently, NicozDiamond managing director Mrs Grace Muradzikwa said sales of the “modernly designed and affordably priced” Diamond Villas cluster houses had started. “Selling of the first units is now on course and I can tell you that there is a lot of interest.
“We funded these units from our cash collections because it made sense to self-fund.
“The company has also partnered with a local bank that is providing mortgage financing. The sales are expected to improve investment income by year end,” said Mrs Muradzikwa.
