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Property market fails to sparkle

Ndamu Sandu

THE grilling of Dawn Properties Ltd directors at the annual general meeting (AGM) in September was a perfect sign that shareholders no longer rubberstamp what has been decide

d by company directors. The property market failed to sparkle.

The venue was Crowne Plaza Monomatapa hotel, also a Dawn property and where directors raised as one of the agenda items the share option scheme for two of its directors.

The company proposed that directors grant options to executive management in full employment up to a maximum 73 500 000 linked units.

This translated into about 10% of the total issued shares to two executive directors from a company that had a turnover of $1,4 billion in the first months of operation since de-merging from Zimsun last year.

“It’s not about incentives, let’s call it self-enrichment,” fumed one shareholder.

However, the proposal sailed through after a vote.

* Merger talks between Dawn and Mashonaland Holdings Ltd (Masholds) collapsed at the eleventh hour due to differences on property valuations.

But the aborted tie-up came with repercussions for Dawn, which incurred $150 million in expenses. Notwithstanding the setback, Dawn has said that it has identified nine potential suitors.

* Managerless National Social Security Authority (Nssa) came under scathing attack from a parliamentary portfolio committee on public accounts for its investments. The committee, led by MDC legislator Priscillah Misihairabwi-Mushonga, observed that Nssa had “no proper investment register” for its holdings in equities, prescribed assets and other properties.

The committee said Nssa, without a substantive general manager since 2000, had made unwise decisions like investing in the stalled Joina Centre project.

The multi-billion project, under construction for the past six years, now requires at least $200 billion to complete. Project promoters are now seeking national project status (NPS)-linked construction incentives to help contain costs.

* A special committee was formed during the course of the year tasked with finding ways on how Parkview Hospital could be completed. The committee, led by Daud Dube of the now defunct Ekusileni Hospital, will present a feasibility study by the end of the year.

Parkview is at the centre of protracted legal wrangle pitting project promoters Universal Health Care Holdings (UHCH) and institutional investors led by First Mutual Ltd (FML).

What has made the matter complex was the declaration by government that it would not intervene in the dispute as Parkview “is not a community hospital”.

* Zimbabwe’s building societies dumped government commercial papers such as Treasury Bill for mortgages citing low returns.

On that, Central Africa Building Society (Cabs) saw its loan book ballooning over the past two years.

The society dished out $37,8 billion in the financial year to June 30.

* The Real Estate Institute of Zimbabwe (REIZ) came under attack from the militant Affirmative Action Group (AAG) over rental increases in Bulawayo. The AAG said that rental increases should be effected twice a year while REIZ advocated quarterly increases. The introduction of the Rent Board was meant to address the problem. REIZ has said that it finds no problem working with the Rent Board as long as its (Rent Board) decisions stimulate property development.

* A new initiative designed to solve acute housing shortages was introduced by Time Bank. The bank invited prospective homeowners to invest between $20 million and $100 million in a housing investment scheme that gives them the choice to own a house after six months. But this noble proposal collapsed when the bank was placed under curatorship two months ago.

* In a new development in the property sector, Estate Agents Council chairman Tavenganiswa Mabikacheche was co-opted into the Reserve Bank of Zimbabwe (RBZ) advisory board.

The board advises the RBZ on policies to be implemented on specific sectors.

Mabikacheche last month presented a paper detailing the revival of the estate and property sector. Known as the “Revival of Real Estate and Property Sector”, the paper was a joint effort of executives from Bard, Knight Frank and Mabikacheche & Associates.

* Solutions to the troubled First National Building Society were elusive throughout the year as various court battles came to nought.

The society was placed under curatorship last year after the arrest of two founding directors — Samson Ruturi and Nicholas Musona for allegedly defrauding the institution of over $1 billion.

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