Pride Mzarabani
HARARE – First Mutual Properties (FMP) reported a decline in the value of their properties due to adoption of the US dollar as a functional currency.
The company property value now stands at US$132.948 million down from US$180 million recorded in the prior financial year. However, the prior year’s Investment Property value was determined by converting the December 2023 local currency value using the official closing interbank.
In its FY2024, FMP noted that the local business environment underwent significant changes that materially impacted the property sector as investment in infrastructure is required to sustain the property market.
The group highlighted that challenges in the property market are leading to high vacancy rates in the Central Business District (CBD) as tenants relocate to suburban offices and office parks. According to a recent report by Knight Frank Zimbabwe vacancy rates in Harare and Bulawayo’s CBDs are reaching 60% and 40% respectively. Businesses are moving away from traffic congestion, parking space shortages and unsatisfactory building conditions, such as malfunctioning elevators and air-conditioning systems in the CBD.
In its developments the group completed its flagship project valued at US$5.1 million, the Arundel Office Park extension which features a double-storey building with a basement providing 2,616.5 square metres of total lettable space. In Zvishavane, FMP is a co-investor and project manager of the development of mixed-use duplex cluster houses three to four-storey apartments and student accommodation.
The company said the project’s first phase comprises six duplex flats which are 90% complete and 20 blocks of double and triple storey flats which are ready for commissioning with construction of the student accommodation progressing well.
The group recorded a Net Property Income increase of 62% to US$4,842,676 while revenue was up 31% to US$9,027,117 driven by growth in property services income predominantly project management fees an upsurge in pure US dollar rentals and timely rental reviews.
First Mutual Properties said that rental income remains its main source of revenue. However, rental collection rates fell from 85% in 2023 to 75% in 2024 due to tenants’ financial challenges.
The company reported that US$945.231 was spent on infrastructure maintenance during the year.
