FIRST Mutual Properties (FMP) says it is eyeing new growth opportunities in the construction of owner occupied office park style buildings and cluster houses among other growing property development trends in the country.
This comes amid challenges in the property sector such as low space absorption in the central business district and inflationary and exchange rate pressure that FMP says are making it difficult to achieve sustainable rentals, which remain the company’s main source of income.
Elisha Moyo, the listed real estate firm’s chairman
“Space absorption remained low during the period under review due to relatively weak demand that resulted in excess supply of space in the Central Business District (CBD) offices and suburban shopping centres,” FMP chairman Elisha Moyo said in a statement accompanying financials.
In contrast, the retail, warehousing and prime office space segments enjoyed relatively strong demand, resulting in high occupancy levels, Moyo added.
“…pressure to preserve value of the local currency denominated rentals remained a top priority for property companies including First Mutual Properties. Against this, quarterly reviews of local currency denominated rentals were being made in tandem with the prevailing business conditions.
“The country has seen some developments in the industrial and retail warehousing sectors. Further, there has been an increase in the development of owner-occupied office park style buildings, cluster houses and residential house conversions and new commercial developments especially in suburbs just outside the CBD and on major roads.
“First Mutual Properties has positioned itself to take advantage of the emerging growth opportunities for the benefit of the shareholders,” Moyo said.
He added that the board had resolved that an interim dividend of $87 million and US$100 000 be declared for the quarter ended June 30, 2022, saying further details on the payment would be communicated in a separate dividend announcement.
“The business outlook remains highly uncertain. Despite this, the company will continue to explore pragmatic strategies to grow the shareholder value including investing in high-yielding properties, which will hedge the company against inflation and exchange rate risks.
“Maintaining high occupancy levels on the back of effective client relationship management, provision of quality and safe product through on-going property refurbishment, maintenance and upgrades will remain a key focus area in the outlook,” Moyo said.
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