The Sunday Mail
Livingstone Marufu
LISTED property concern, Mashonaland Holdings, is banking on acquiring more land and developing the existing land bank to turnaround its operations after posting a staggering loss of US$6,04 million for the year ending September 30, 2015.
Mashonaland Holdings is planning to commit over US$21 million in the construction of 120 houses in Harare’s upmarket suburbs.
The projects to be developed on the business’s 100-hectare land bank are forecasted to positively impact on the group’s top-line. In a statement accompanying the group’s results, Mashonaland Holdings chairman Mr Ronald Mutandagayi said the group will develop its land bank and acquire more land to boost revenues and profitability going forward.
“The group will continue with the development of some of its existing land banks whilst scouting for additional land. The board is actively evaluating its existing portfolio with the view of utilising its strong asset base in exploiting opportunities that lie ahead,” said Mr Mutandagayi.
“The board approved the development of a large retail shop in one of its existing land banks in the Houghton Park suburb.
“Construction work on site started in November and completion is forecasted for August 2016.
Mr Mutandagayi said the project is expected to deliver 2 200 square metres of gross lettable area to the portfolio and its outlay is estimated at US$2 million while the expected entry yield is six percent.
He said the group received the long-awaited planning permit for a US$19 million proposed upmarket residential development on its prime land banks.
“Progress is being made on other targeted areas. The cautious acquisition of additional land stock to meet demand for high to medium density housing remains a priority,” said Mr Mutandagayi.
According to the Mashonaland Holding’s financials, the business environment in the property sector is mainly characterised by massive retrenchments, company closures, deflation and reduced aggregate demand.
This resulted in a number of firms downsizing their let table space, thus putting pressure on revenues because of declining occupancy.
Mashonaland Holdings’ property portfolio was valued at US$99 million this year, down seven percent from US$104,2 million in 2014 after factoring acquisitions and improvements undertaken during the year.
Occupancy levels stood at 76 percent compared to 82 percent recorded in the prior year.
Similarly, revenue for the year was also 14 percent down from US$6,8 million in 2014 to US$5,9 million due to increasing void levels and some lease reviews in the portfolio. The group is actively pursuing alternative income streams to grow the revenue base.
