PROPERTY investment and development company Mashonaland Holdings Limited has recorded a 98% revenue increase from ZW$1.9 billion to ZW$3.8 billion for the year ended 31 December 2022.
PRISCA TSHUMA
In a statement accompanying the group’s financial results, chairperson Grace Bema attributed the increase to the positive performance of the Mashview Gardens cluster housing development.
“The revenue growth was mainly driven by revenue earned by the Mashview Gardens cluster housing development amounting to ZW$1.2 billion, which contributed 30 percent of the revenue performance,” she said.
Bema added that a 34% increase in rental income to ZW$2.6 billion also contributed to the revenue performance despite the change in financial year-end in 2021.
“The increase in rental income was driven in part by periodic rent reviews to align rentals with obtaining market conditions and also improved market occupancy which grew from 81 percent in 2021 to 87 percent in December 2022,” said Bema.
In the period under review, the property occupier submarket adopted measures such as the frequent rent reviews, indexation and charging of rentals in US dollars, as the country continues to dollarise, to ensure inflation hedging.
“This attribute has attracted more investments towards specific pockets of the property market such as the small sub-urban retail sector as opposed to the traditional, large and capital intensive centrally located retail malls,” said Bema.
The group recorded an annual profit of ZW$17.2 billion from a loss of ZW$4.8 billion recorded in the prior year, due to the improved operating profitability and 39% capital gain in investment properties.
Independent and professional property valuer EPG Global valued the group’s investment property at ZW$68 billion as at 31 December 2022, representing a capital gain of 39%.
“The gain was achieved through the group’s periodic rent reviews to hedge against rising inflation as well as firming values for the Group’s strategically located land banks. This realignment is reflected in the growth in rental income in inflation-adjusted terms,” Bema said.
The operating profit before fair value adjustments increased by 243% from ZW$ 1 billion to ZW$3.5 billion partly due to foreign exchange gains of ZW$3 billion, which were realised on foreign currency balances on hand following the disposal of the Charter House.
Mashonaland Holdings disposed of Charter House during the financial year as part of its diversification strategy, which entails reduction of Harare central business district office exposure and deployment of the sales proceeds towards the development of strategic investment assets in line with emerging market needs.
During this financial year, the group acquired a 4-hectare site in Pomona for the development of a wholesale centre and; 2-hectare land along Borrowdale Road for the development of an office park as part of its diversification and growth strategy.
Bema said the group’s strategy going forward will remain targeted at delivering on its long-term plan which is hinged on diversification and increasing operational efficiencies to ensure sustained business growth.
