Pearl revenue depressed

HARARE - Pearl Properties (Pearl)’s revenue declined one percent to $2,9 million in the four months to April 2014 compared to prior comparable period on the back of rental defaults.

During the period, rental arrears ballooned to $2,1 million from $1,76 million as at December 2013.

The listed group’s chief executive Francis Nyambiri said “some tenants are failing to pay rentals” but they will “try to contain the rate of defaults”.

Nyambiri, in his trading update at the company’s annual general meeting on Tuesday, said property expenses during the period under review increased by $171 000 to $634 000 due to higher default provisions.

However, Nyambiri noted that about $1,1 million in rental arrears has since been paid as of May.  Overall, property rentals in Zimbabwe are likely to remain subdued due to high tenant default levels.

In the four months, Pearl’s occupancy levels increased to 79,45 percent from 76,30 percent registered in December 2013.

Administration expenses were within budget at $988 000, having declined by $300 000 from prior comparable period.

Total rental collections in the four months amounted to $2,716 million while rentals per square metre were down to $7,61 from $8,01 prior year.

Meanwhile, during the year to December 2013, Pearl’s revenue increased by 2,1 percent to $9,002 million compared to previous year on the back of increase in rentals and other income from property services rendered to third parties.

In the year, rental income increased by 2,06 percent to $9,012 million, driven by increase in the contribution of turnover-based rental income.

Net property income marginally rose 1,91 percent to $7,3 million as a result of rental reviews and new lettings.

Operating profit before tax and fair value adjustments declined by 1,42 percent to $4,4 million due to slower growth in fair value adjustments properties.

The market value on investments properties grew 6,5 percent to $128 million, underpinned by improving quality of the refurbished space and re-zoning to commercial of land previously zoned as residential.

Occupancy levels fell by 3,3 percentage points to 76,3 percent as a result of decline in space demand due to economic challenges. This was compounded by increase in vacations, evictions and company closures.

Tenant arrears significantly increased by 60,7 percent on tight liquidity and economic downturn.

Rentals per square metre rose by 1,22 percent to $8,28  due to review in rentals, leasing of vacant space and new lettings.

Rentals from the CBD retail contributed 29,4 percent to rental income.

Arrears level declined by 21 percent, reflecting improved performance by retailers and occupancy level declined by 3,31 percentage points to 95,14 percent.

Comments (2)

government is not doing enough in collection of revenue.how much cash is it loosing by not following up liquor outlets in urban and rural areas.Outlets which open late at night are really checked.Offices responsible do not follow up.Rural councils do not even know the number of liquor outlets in their districts.All that is cash in terms of licences.

shonhiwa cc - 29 May 2014

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