ZIMRE Property Investments (ZPI) generated rental income of US$1,94 million in the half-year to June 2013, a 4% increase on the same period last year, in spite of liquidity constraints dogging the economy.
At the company’s analysts briefing for the half year ended June 30 2013, MD Edson Muvingi said the company expected no major changes for the remainder of the year, with revenue growth expected to flatten towards November and December.
“The last two months of the year are bad in the collection of rentals as some will tell you they have shut down when they are still trading,” said Muvingi.
A significant increase in rental arrears and void space was witnessed in the period under review as some businesses ended up vacating the central business district, closing down or downsizing.
Muvingi said liquidity challenges dogged the business, with no signs of improvement in sight, particularly for the property sector.
Muvingi said access to lines of credit for the sector remained constrained, with both local and foreign lines of credit either too short or too expensive for long-term property development projects, or unavailable altogether.
Despite the challenges, ZPI posted positive results in the period under review, chalking an operating profit of US$1,6 million compared to US$1,5 million previously, an 8% improvement.
Administration expenses went up to US$1 million from US$760 000 last year, while other operating expenses amounted to US$1 million, up from US$683 000.
Giving an update on the group’s projects, Muvingi said the company’s Tynwald project in Harare had been completed and the first phase has been sold out.
Partial compliance for the project had been obtained from the city of Harare with full compliance expected by end of September 2013.
A total of 151 stands have been sold at a value of US$1, 64 million.
This represents 44% of the total project in terms of land area and 60% of the project cost hadbeen recovered. The total value of the project at current prices was estimated at US$3,84 million, an expected return of 41%.
A total of 153 stands, representing 43% of land area, had been sold at a value of US$2, 7 million in the Zimre Park Masvingo project. The project is expected realise US$6,96 million at a return of 42%.