‘Sustainable rentals’ a major challenge in Zimbabwe

MASHONALAND Holdings (Mash Holdings) says attaining sustainable rentals has remained a major challenge for the property industry owing to the exchange rate fluctuations and wide disparities between official and unofficial exchange rates.
Although the government has been successful in maintaining the stability of the exchange rate, the wide disparities between the official and parallel market exchange rates have remained, with the official rate at around $5 000, while the parallel market is around $7 000 against the greenback.
“In view of this background, property companies have converted property leases for prime properties to United States dollars terms, while frequent reviews have been maintained for Zimbabwe dollar-based leases to preserve rental yields,” Mash Holdings board chairperson, Grace Bema, said in a statement accompanying the group’s financials.

During the half year ended June 30, 2022, the group’s investment property portfolio was valued at $453 billion, representing a 117 percent capital gain from the inflation adjusted valuation performed in December 2022.
The group completed all pre-construction works for the Pomona Commercial Centre, which encompassed architectural and engineering designs, statutory and corporate approvals, tendering and award of tenders.
“The development concept consists of wholesaling and flexible warehousing units with 14 000 square metres lettable area.
“The anchor tenant has been secured and 60 percent of the development has been successfully pre-leased,” Bema said.
The Milton Park Day Hospital project is now 90 percent complete, with roof cover installations having been completed and external paving works, elevator installations in progress.
Mash Holdings’ Mashview Gardens cluster housing project is now substantially complete, with finishing works comprising of tiling, plumbing, and electrical fit-out being finalised.
“External works comprising of water reticulation, electrical connections and landscaping are also currently underway. The units are planned for handover in September 2023,” Bema said.
During the period under review, revenue increased by 150 percent to $8,7 billion. Rental income contributed to the improved revenue performance, posting a 115 percent growth.
“The group now earns 74 percent of its rental revenue in foreign currency, up from 35 percent at the same time last year.
“The portfolio occupancy levels increased from 83 percent in June 2022 to 87 percent, contributing to revenue growth,” Bema said.
“Further, the group earned revenue of $1,2 billion from the Mashview Gardens housing project as the project reached the practical completion stage.”
Mash Holdings registered a profit of $236,4 billion, up from $7,7 billion in 2022 due to improved operating profitability and a 117 percent capital gain recorded on investment properties.
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