DAWN Properties says it has experienced mixed results, with foreign currency earnings from hotels cushioning it against the downturn in the market, but the company has been affected by increasing rentals.
By Melody Chikono
Dawn Properties is involved in real estate investment, development and consulting in Zimbabwe.
Dawn MD Patrick Matute told businessdigest on the sidelines of the Marlborough Sunset Views ground-breaking ceremony on Tuesday he was hoping to see demand increase on the back of existing properties, which will push vacancies and reduce defaults.
Matute said Dawn’s long-term prospects are in value preservation, thus the strengthening of its thrust in property development. The property development projects will see Dawn developing stands and building houses. Dawn Properties on Tuesday launched a ZW$200 million housing development at its Marlborough Sunset Views in Harare.
“It has been challenging but we have been blessed that part of our income from our hotel property is in forex. So that portion is obviously translated at interbank so that sort of cushions us against the downturn in the market,” Matute said. “But you know on the consulting side we have had pains, increasing rent is not always an easy thing but we are making progress. We must do it (consultancy) on behalf of our other clients that we manage their properties for. So it has been a mixed bag. Overall, we are positive.
“Our long-term prospects value is that we are now focussing on property development, developing stands, building houses. Either way, people will still need somewhere to live in the long term so we don’t think we will ever go wrong with property development,” he said.
In the short to medium term, Matute said he expected challenges and headwinds, but the company is still positive on the long-term prospects despite the challenging macroeconomic environment. “We have few projects in the pipeline, but I think for us we are mainly focussing on this one. We still have land banks in Mandara and Borrowdale. But this one will be the first. It will probably take us about a year-and-a-half to fully finish and then we will go on to the next project in the pipeline. In terms of occupancies and rental defaults, we see ourselves faring well,” he said.
“I think our long-term strategies will determine if we can retain our long-term tenants and find a mechanism for them to be able to be sustainable yet also paying rentals. We have been responsible as we are just pegging rates and linking them to inflation. Collection rates are around 90%. Our vacancies factor about 16%.”