Pearl Properties is a subsidiary of Afre Corporation and is the largest property company listed on the local bourse.
It is a holding company that operates commercial and retail properties in major towns in Zimbabwe.
These include office parks, high-rise buildings in central business districts, warehouses, retail and industrial premises.
Presenting the company’s audited financial statement for the year ending December 2009, chairman Danmore Kundishora said the property company is in the process of taking legal action against defaulting tenants.
‘‘Tenants’ debts were US$928 212, representing 21,9% of arrears. Management is actively managing these arrears with legal action against defaulting tenants. Amounts handed over constitute 53,5% of the total arrears position,’’ he said.
To guard against non-payment, Pearl Properties has embarked on a “tenant restructuring programme” and is mainly targeting tenants defaulting in rental payments and operating costs.
This has enabled the company to provide office space to quality tenants, in the process re-pricing lettable space and reducing the risk of non-payment of rentals and operating costs.
The Zimbabwe Stock Exchange listed firm has about 117 000 square metres of lettable space across the country.
In rentals, the company racked in US$4, 22 million and this is attributed to the usage of foreign currency.
“Aggressive rental negations and the improved quality of tenants also contributed to the growth in rentals during the year,” said Kundishora.
However, Pearl Properties said the rentals charged in Zimbabwe were far below those charged in the region.
“The average rent per square metre achieved for the year was US$3,04, which remains below the regional average rentals ranging form US$10 per square metre to US$15 per square metre for similar portfolios,” he said.
“The total income per square metre achieved is US$3,67. The marginal increase in total income per square metre reflects the fair value judgments on equities acquired with excess rental income.”
Kundishora said the rental yield achieved during the year was 4,85% up from 1,21% in 2008, a reflection
of the growth in rental income in 2009.
The rental yield achieved was below the average regional yield that ranges from 8% to 15%.
However, the company posted a US$3,1 million profit before tax for the year ending December 2009.
This was attributed to the introduction of multiple currencies.
‘‘The operating profit before tax achieved for the year was US$3,1 million. The company is able to sustain operations from rental income and invest excess funds in new developments and deferred maintenance,” Kundishora said. ‘‘The introduction of the multiple currencies regime resulted in a stable operating environment following years of uncertainty because of hyper-inflation.’’
Liquidity constraints were still hampering the operations of the property market, Kundishora observed.