The Sunday Mail
Zimre Property Investment Limited reported a 100 percent jump in operating profit to $1,4 million for the year to December 31, 2017, driven by the sale of residential stands.
Indications from ZPI are that activity was mainly oiled by the availability of mortgage financing, favourable payment terms and the desire to hedge against inflation and exchange rate changes.
However, revenue for 2017 eased four percent to $5,3 million compared to $5,5 million in the prior year as rental income narrowed.
Management said industry-wide, there had been an increase in voids on depressed demand as tenants opted for cheaper properties. Tenants continued to reduce occupied office and industrial space, and continued to seek rent reductions to manage operating costs.
“This resulted in excess supply of office and industrial space,” said ZPI chair Mrs Jean Maguranyanga in a statement accompanying the group’s financials. As such, ZPI’s rental income declined by 11 percent to $2,7 million compared to $3,1 million in the prior year. She said retail space performed comparatively better than other sectors. Investment properties were valued by independent valuers at $34,6 million, which was a 2 percent decline from the $35,3 million in the prior year. The figure excludes Zimre Centre Harare.
There was a marginal increase in portfolio average yield from seven percent in 2016 to 7,8 percent whilst voids increased to 26 percent from 24 percent in the prior year. A negative fair value adjustment on investment property of $7 million was recorded as at year end compared to the $2,8 million negative fair value adjustment in 2016.
This resulted in profit for the year of $2,5 million compared to a loss of $1,5 million in the prior year. Total assets grew to $56 million from $52 million. ZPI declared a dividend of 0,03 cents a share. Meanwhile, the firm is proceeding with major projects such as the Victoria Falls shopping mall that will house major retail chains, banks, food courts and restaurants.
Management is upbeat about performance in 2018, although demand for CBD office and industrial space is expected to remain subdued.
