FMP occupancy rises to 89% to boost net property income in Q3

0
94
First Mutual Properties Pearl House
First Mutual Properties Pearl House

Tadiwa Musiyiwa

HARARE – Property firm, First Mutual Properties’ net property income grew by 62% driven by a 49% increase in revenue growth and cost containment measures.

In a trading update, company secretary Dulcie Kandwe said the company’s revenue increased to ZWL360.1 million compared to the same period last year. The increase followed rent reviews, turnover rentals and the rise in occupancy levels to 89%.

“The business saw positive movement in occupancy levels especially in the CBD Office sector, closing the quarter at 72%. The performance of the office park, industrial and retail sectors remained resilient despite the COVID-19 pandemic” she said.

Kandwe said the company reinvested ZWL20.7 million during the period under review as the business continued to invest in repairs and maintenance to upgrade space and accelerate leasing efforts.

Administration expenses to revenue ratio stood at 38% for the period as digital strategies were accelerated to deliberate efforts to retain talent. Investment properties as at the end of the quarter were valued at ZWL15 billion following a Directors valuation.

However, Kandwe said the property market remained subdued with persistent demand and supply imbalances affecting pricing, while subdued macro-economic fundamentals dampened demand for space driven by excess supply in the CBD offices.

“Pricing of rentals continue to evolve, with property owners seeking to hedge against inflation and currency depreciation risk by shortening rent review periods and adopting pricing models within the confines of prevailing legislation”.

Kwande further said there continued to be a limit in development activity, with the majority of developments primarily being owner occupied industrial or retail warehousing projects, office park style buildings and residential to commercial conversions in suburbs just outside the CBD.

She said the COVID-19 pandemic continued to affect the construction sector as delivery of projects were slowed down due to site safety requirements in line with COVID-19 protocols, with contractors also adapting supply chain schedules to cater for increased delivery timeframes.

Nonetheless economic activity improved in the third quarter of 2021 as the government relaxed lock down measures. The lockdown early in the year had delayed rent review efforts, hindered collections and planned maintenance initiatives, with significant effort made in the third quarter 2021 to bridge the gap.

Collections declined during the quarter to 81% from 82% in the second quarter 2021, as tenants remained affected by the varying lockdowns and failed to generate income to clear their obligations.

At a meeting held on 8 November 2021, the Board resolved that a third interim dividend of ZWL13 982 820 being 2.0331 ZWL cents per share be declared from the profits for the quarter ended 30 September 2021.

Kandwe said the dividend would be payable on or about 17 December 2021 to all shareholders of the Group registered at close of business on 3 December 2021.

The shares of the Group will be traded cum-dividend on the ZSE up to 30 November 2021 and ex-dividend as from 1 December 2021.

The company has continued to look for opportunities within the market to further grow and differentiate the property portfolio, with strong emphasis on the improvement in the performance of the existing property portfolio and sustainably managing operating expenses.

close

Sign up to receive awesome content in your inbox, every day.

We don’t spam! Read our privacy policy for more info.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

eight + fourteen =