DAWN Properties Limited says the property consultancy business may remain constrained across the board as the economy continues to be depressed at a time real-estate development has also been affected by economic turmoil and the Covid-19 pandemic.
The property concern, whose other primary business is real estate advisory and valuation, saw a 10% decline in revenues, attributed to the poor performance of the economy coupled with the coronavirus outbreak.
Dawn Properties MD Justin Dowa (pictured) told The NewsHawks that Covid- 19 was not the biggest challenge the sector has had to endure as the deteriorating economy played a huge part in the performance of the consultancy unit.
“Covid-19 is not the worst we have heard to endure. If the economy improves, the business improves. When the economy is depressed, the business is also depressed. For us, it’s our primary business and we have witnessed that over time. Should the economy improve, we will be able to come out of the woods,” he said.
Dawn’s property consultancy revenue, at $43,7 million, registered a 10% decline from prior year.
The lower-than-prior-year performance was mainly due to subdued business during the Covid-19 lockdown period as well as the loss of a significant clientele, effective 31 March 2020.
The valuations and advisory cluster contributed 59% of the total property consultancy revenue compared with 41% during the same period in prior year while the property management cluster contributed 32% of revenue compared with 49% in the same period prior year.
At the same time, Dowa said the Covid-19 pandemic and the poor economic performance have also had an impact on the absorption rate when it comes to property development.
The company has now placed on the market the Sunset Views housing stands, but Dowa said Dawn had adopted a selective approach to the disposal of the stands.
Dowa added that the company was also riding on the use of free funds as the stands we being sold on a cash basis in US dollars.
“The use of free funds has thus become a positive on its impact economy-wise as funds that were previously held can now be circulated. So on the economy and the pandemic, I would say yes and no.
“Yes, in the sense that if it wasn’t for the pandemic and the bad economy, the absorption rate could have been better.
“However, we have also developed a selective approach on who we deal with in these uncertain times. So we are selling the stands in cash. We are not in a hurry to dispose of them, so as and when they are sold up, we don’t have any timeline.”
Servicing of 65 stands under Phase 1A of Marlborough Sunset Views, measuring on average 2 000 square metres each, was completed in July 2020. As at 30 September 2020, the group had sold eight stands.
In a trading update, the company said the impact of the coronavirus pandemic and the general decline in economic activity continued to curtail productivity and growth. Falling aggregate demand persisted amid tight liquidity in the market.
The Zimbabwean economy is, however, expected to shrink from last year’s level, with the Ministry of Finance and the International Monetary Fund projecting that the Gross Domestic Product growth rate for full-year 2020 will be -4.5% and -0.4% respectively.