Mash Holdings occupancies down 6%

Published: 21 June 2015

Mashonaland Holdings (Masholdings) says its property occupancies slumped by six percentage points to 79 percent in the half year to March 31, 2015, on the back of declining economic conditions in Zimbabwe.

Manfred Mahari, Mash Holdings chief executive, said the listed property firm's collection rate for the period was 74 percent from 78 percent recorded during the prior period, as tenant default risk remained a "real threat to business"

"The group posted an after tax profit of $931 675 from $1,57 million. A drop in finance income during the reporting period negatively affected profits," he said adding that revenue for the period stood at $2,98 million from $3,64 million, 18 percent below prior year due to falling occupancy levels and downward rent reviews in the portfolio.

A net property income after administration expenses of $1,39 million was recorded for the period under review, which was 18 percent below prior period.

However, despite the drop in net property income, the operating profit margin was stable at 46 percent, compared to 45 percent recorded prior comparative period.

During the period under review, Mash Holdings acquired two new properties in Ruwa and Belgravia, at $2,6 million, earmarked for future residential and office development respectively.

Mahari said the realtor's Belgravia office development was also completed during the period under review, and was handed over to a tenant.

"The project cost, including land and net of Vat, was $4,8 million. This added 2 880 square meters of lettable pace to the portfolio. The projected net annual rental from this property is $400 000 implying an initial property yield of eight percent," he said.

Mahari noted that the rental market, which has been stagnant in the past year, will remain depressed, due to tight liquidity conditions coupled with a deteriorating economic environment.

"The rental market has stagnated, and is likely to remain subdued for the rest of the year. Fortunes are not looking good for most players in our industry so, tenant retention will remain one of our top priorities," Mahari said.

Meanwhile, the property firm recorded depressed revenues for the four months to January 2015, with revenues taking a 17 percent knock to $2,1 million.

Most property firms are now concentrating on residential properties as most tenants are shying away from conventional office space; preferring subdivided units as they are cheaper.
- dailynews

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