Depressed property market hits Mash

HARARE - Listed properties firm Mashonaland Holdings Limited (Mash) reported a six percent decline in revenue to $3, 6 million in the half year to March 2014 on the back of a slump in occupancy levels.

The group said the subdued economic environment led to tenants failing to meet their lease obligations.

“Mortgage finance remained elusive curtailing activity in the real estate sector,” said its chairperson Elisha Mushayakarara.

While rental levels declined across all sectors of the group’s portfolio, the office sector was the most affected.

“Collection levels declined from 89 percent as at September 30, 2013 to 81 percent,” he said.

The office sector constitutes 46 percent of the group’s entire portfolio.

During the period, Mushayakarara said private and public sector tenants continued to downsize on space requirements, leading to an 85 percent decline in occupancy levels, compared to 89 percent in prior comparable period.

Property expenses were 17 percent of the group’s income at $0,6 million, 57 percent above 2013’s $0,4 million.

Operating costs relating to voids constituted 28 percent of total expenses.

“Administrative expenses at $1,4 million increased by 42 percent compared to the $1 million recorded for the same period last year,” said Mushayakarara, adding that “this increase was mainly driven by the payment for the performance-based incentive scheme”.

The group posted a $1,6 million after tax profit, 28 percent below the $2,1 million released in previous comparable period.

“Administrative to income ratio was 37 percent, while net property income after administrative expense was $1,7 million compared to $2,6 million for the prior year, representing a margin of 45 percent,” said the property firm.

Shareholders renewed a share buyback scheme at the group’s annual general meeting, which saw a further $2 million shares being bought at the cumulative number of treasury shares to 162 million.

“The approved number of the shares for the scheme is 200 million as of March 31 2014, the market value of the treasury shares held was $4 million,” the group said.

The group also said its office development project in Belgravia is on schedule, and beneficial occupation is earmarked for end of August 2014.

Two residential projects are also being pursued in Westgate and Hazeldene, in the capital, and they are at different stages of municipal approvals.

No interim dividend was declared for the period.

 

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