FIRST Mutual Properties (FMP) chairperson Elisha Moyo says despite ongoing uncertainty in the country, the business will implement strategic growth strategies to boost shareholder value.
The business aims to enhance shareholder value by focusing on key growth areas and mitigating risks arising from exchange rate distortions.
Moyo said fluctuations in the exchange rate could impact the property-related income mix between United States dollars (USD) and Zimbabwean dollars (ZWG), as clients may seek to exploit premiums and shocks associated with currency volatility.
Zimbabwe’s economy is expected to face further challenges, with GDP growth forecast to slow to 2% from 3,5%, largely due to the El Niño-induced drought, according to government projections.
The drought is anticipated to increase imports and further narrow the country's current account balance.
However, Moyo remains upbeat, focusing on growth strategies to enhance shareholder value.
“This includes investing in lucrative properties that can serve as a safeguard against inflation,” he said in a statement accompanying the group's financial results for the half year ended June 30, 2024.
“Additionally, the business will prioritise maintaining high occupancy levels by effectively managing client relationships and offering quality and secure products through continuous property refurbishment, maintenance, and upgrades.”
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He also highlighted that the business has strategically positioned itself to generate shareholder value by pursuing various projects at varying execution stages.
The group’s flagship project is the Arundel Office Park extension, whose scope involves building a double-storey office block with a basement.
Significant progress has been made on the project and it is nearing completion, Moyo revealed.
The group is a co-investor and project manager in constructing a 388-bed student accommodation building near the Chinhoyi University of Technology.
According to the chairperson, the project is at an advanced stage of fitting furniture and biometric security features, with completion expected in August 2024.
In Zvishavane, FMP is leading the development of mixed-use duplex clusters, three- to four-storey apartments, and student hostels.
The project has been approved by the Zvishavane Town Council and is being executed in three phases.
Phase A, which includes six duplex flats and 20 blocks of double- and triple-storey flats, is already in progress, with completion targeted for September 30, 2024.
The group’s net property income in the period under review stood at US$2,4 million, while the revenue amounted to US$4,3 million.
Rental income remained the main source of revenue. The occupancy level averaged 89% for the period under review.
Moyo said management continued to engage the tenants for timeous rental payments.
For the half year, the collection rate achieved was 56%.
He said the growth in rentals was in line with market developments, which was responsible for the growth in the property portfolio’s value by 2,7%.
The group's property portfolio was valued at US$124,8 million as at June 30, 2024, according to an independent property valuation conducted by Knight Frank Zimbabwe.
