During the period under review, the group’s property portfolio was valued at US$95,5 million by independent professional valuers Knight Frank Zimbabwe. This was a 17 percent increase from the portfolio market value of US$81,4 million reported for the previous year. The major driver of this uplift was the rental growth within the company’s portfolio.
Portfolio replacement costs remained higher than market values. Total market value indicated an 18 percent discounted to the total depreciated replacement cost, compared to only eight percent last year.
This continued divergence between the two values for our portfolio and indeed for the whole market in general indicates market ineffiencies.
“A rental growth of 31 percent was achieved in the year under review. The major contributor was the office sector which contributed 77 percent of total revenue. The contribution was however down from the 80 percent recorded in the prior year, showing a marginal increase in the contribution of the other sectors,” said the group chairman Elisha Mushayakarara.
During the period under review effective average rent per square metre for the portfolio increased to US$6,39 from US$4,47.
“Due to the uncertainties in the macro-economic environment, future rent negotiations will be largely reflective of these circumstances,” Mushayakarara said.
Property expenses at US$0,69 million from US$0,63 million were 10 percent higher than prior year. He said property management costs and voids related operating costs continued to be key drivers of this expenditure.
“Administration expenses at US$1,98 million from US$1,56 was a 27 percent increase from last year 28 percent. Although expenses increased by 27 percent from prior year,” he said.
The group’s profit declined by 48 percent to US$17,23 million from US$34,20 million.
“The group posted a net property income after administration expenses of US$5 million from US$3,59 million representing a growth of 40 percent. Growth in net property income was largely driven by increases in rental income,” he said.
The fair value adjustment on the group’s investment properties was US$13,89 million from US$20,12 million. Investment properties growth of 17 percent was underpinned by the improvement in rental income.
Post published in: Business