Harare — AFRICA First ReNaissance Corporation listed property arm, Pearl Properties' property values crushed 22 percent in the first quarter of 2009 as a result of the liquidity crunch stemming from the shift to the use of the multi-currency system.

The property write down saw the group losing US$16,6 million to end the year at US$72 million resulting in a pretax loss position of US$14,2 million.

In its audited financials for the full year ended December 31 2009 Pearl said changes in the tax laws resulted in a tax credit of US$16,7 million taking them to a profit after tax of US$2,5 million and comprehensive income of US$4,7 million.

The group's balance sheet ended 11 percent lower at US$80,4 million after their investment property portfolio fell from US$88,8 million to US$72,1 million.

Pearl closed the period cash positive at US$75 029 with debt of US$638 000.

During the period under review rental yields averaged 4,9 percent while the vacancy rate stood at 10,2 percent.

The group said low vacancy rate was voluntary as they were trying to restructure their tenant mix to offer near-regional rentals and they have been clearing some office space for refurbishment.

Rental arrears stood at 22 percent as most tenants in the first quarter failed to meet the newly implemented United States dollar rentals. As such, they have been negotiating on how best they can settle their rental obligations, though not at a fast pace.

Going forward, the group is targeting rental yields of 11 percent from rentals of US$5,50 per square metre.

Meanwhile, the group will spend more than US$3,8 million towards the construction of new projects and the refurbishment of existing properties.

In financials for the year ending December 31 2009, the group said they would be spending US$600 000 to refurbish George Square at Kamfinsa Shopping Centre to make it a roofed shopping arcade.

In addition, the group is also planning to construct 38 units of cluster homes -- a project expected to start next month at an estimated cost of US$2,1 million.

The OK Mabvuku project will be completed this year at an estimated cost of US$1,7 million.

During the period under review Pearl Properties posted an impressive set of results. From an average rental per square metre of US$3,04 they made rental incomes of US$4, 2 million and total income of US$5,3 million.

Pearl incurred operating expenses of US$2,2 million to post an operating profit of US$3 million and profit before tax of US$3,1 million.