Dawn increases property portfolio

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DAWN Properties Limited (Dawn) says it will this year increase its investment property portfolio in tourist resort areas to boast revenue as return on investment in such zones is generally higher.
Commenting on the company’s outlook after the group recorded a revenue of $11,2 million for the year to December 31, 2018, a 117 percent increase from $5,1 million achieved last year, Phibion Gwatidzo, Dawn chairman, said increasing the land bank was their major focus this year.
Gwatidzo said the increase in revenue was mainly attributed to recognition of the property development income coming from the company’s first development in Marlborough, Harare and a stronger performance from the property investment portfolio.
“The group’s new strategic initiatives from 2019 (will be) investment property portfolio – focus remains on increasing our exposure to Victoria Falls and Hwange. To that end, the company has purchased additional land in Victoria Falls (3,7 hectares),” he said.

Property is one of the safest investments in an inflationary environment, whose return is usually at par or above inflation.
“Exciting new projects are being planned for the two areas and will be announced as and when construction commences,” Gwatidzo said.
He said the group will also continue to focus on driving contract sales and rentals.
“On property development, Dawn will continue to enhance internal capacity and execute a number of pipeline projects. Our land bank gives the company the ability to create a sustainable business unit going forward,” he said.
Dawn recorded a profit after tax of $3,5 million, a 16 percent increase from $3 million during the period under review. Rental revenue earned for the financial period was $4 million compared to $3 million in 2017.
“… all the properties performed better than last year, the total increase of 36 percent was mainly attributable to increased rentals from Elephant Hills Resort and Conference, up by 46 percent. Troutbeck Resort was up by 40 percent and Holiday Inn Mutare up by 35 percent,” said Gwatidzo.
The company’s rental yield improved from 4,2 percent recorded in 2017 to 5,4 percent last year. The company’s management team, in conjunction with African Sun Limited, said it would continue to work on a number of measures to ensure that this key performance indicator improves significantly.
“Our target remains a yield of 7,5 percent by 2020,” he said.
Dawn’s operating expenses amounted to $4,2 million compared with $2,9 million for the same period in 2017, representing a 44 percent increase in costs.
The significant increase came on the back of general increase in costs in line with inflationary pressures experienced last year and renovation work in some of the property investments, with specific mention of Blue Swallow Lodges in Nyanga.
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