FM Properties’ Arundel project nears completion

FIRST Mutual Properties (FMP) says its Arundel Office Park project is now 75 percent complete and will be commissioned within four months.
It also comes as a number businesses have moved their offices from Harare’s central business district to avoid congestion and traffic.
“This is significant to the group, the shareholders and other key stakeholders given its transformative impact on the group’s portfolio,” FMP said in a trading update for the quarter ended September 30, 2023.
“To date a total of US$3,28 million has been spent on the project. Project commissioning is expected by the 27th of March 2024.
“Providing space in the right form, location and quality remains a key issue in the property market.”

The firm noted that demand for CBD offices continued to fall due to the “substitution” effect from alternative facilities along major arterial routes. The transition is poised to result in a decline in property values in the CBD area, as the reduced demand impacts the rental or sale prices of office spaces.
It said increased and sustained real estate development in the nation depends on having access to long-term finance and stable currency.
“It is against this background that the industry has continued to explore innovative funding structures resulting in significant residential, retail, industrial and space repurposing developments in the country. Further, there has been increased expenditure on public infrastructure,” she said.
Accordingly, the majority of the group’s tenants paid their rentals in foreign currency. There has been an increased use of US dollar transactions in the market as more companies pay their workers in greenback.
“At a business level, most tenants paid rentals in US dollars while the local currency was mainly used to cover operating costs. Management continued to adapt its strategies to the changes in the external environment to deliver on operational excellence and strategy.”
FMP’s inflation adjusted revenue rose by 226,04 percent to $18,49 billion from $5,67 billion in the comparative period.
This was attributed to rent reviews, improved pure US dollar business and a marginal increase in the occupancy level to 87,82 percent from 87,31 percent in the same period last year.
Net property income surged by 503,60 percent to $8,21 billion underpinned by improved levels of rental income. Rentals are the company’s main source of income.
Collections stood at 85 percent, up from 80 percent in the comparable period last year.
A total of $1,5 billion was applied to property maintenance. Investment properties as at September 30, 2023 were valued at $865,31 billion, a 141,98 percent fair value gain from the December 31, 2022 value of $357,6 billion.
Profit for the period was 698,87 percent higher at 502,65 billion.
The company said it would focus on purchasing “all-weather” assets that are resilient to external shocks.
newsdesk@fingaz.co