ZIMRE Property Investment (ZPI) says it has evicted 137 tenants since the economy was formally dollarised in 2009 for failing to pay their US dollar rentals.
Giving an update at the company's annual general meeting on Friday last week, ZPI managing director Edson Muvingi said the evicted tenants had failed to realise that they needed to change their models if they were to survive in a US dollar economy.
"They (tenants) were evicted through the courts. Recovery of some of the rental owed has not been easy. We have had to write-off some of the debts, thus affecting our financial performance," said Muvingi.
Muvingi said the company's net rental income for the three months ending March 31, 2012 was US$887 031, a 30 percent increase from US$680 573 realised during the same period last year. The net rental achieved was six percent lower than the budgeted US$945 950 for the period ending March 31, 2012.
The group's total income for the three months ending March 31, 2012 was US$1 551 417, a 95 percent increase from US$794 407 realised last year. The figure was five percent more than the initial budget of US$1 472 706.
"Operating profit for the three months to March 31 this year was US$763 910 from US$351 566 recorded during the same period last year," Muvingi said.
The figure represents a 117 percent increase and six percent rise from the initial budget of US$719 647.
Muvingi said the company was projecting a total revenue of US$6,9 million from its Zimre Park in Masvingo. The total cost of the project was US$4,9 million.
"Total stands in the project are 338 and 100 have been sold to date. Of the 238 stands remaining, 198 stands are currently available for sale at present," he said.
Total sales achieved to date from the Masvingo project was US$1,9 million.
Commenting on the company's investment property, ZPI said its Portfolio rentals were "marginally reviewed" upwards in line with obtaining market rates by December 2011.
The rentals averaged US$7, US$15 and US$2 per square metre for office, retail and industrial space respectively.
The rentals increased from US$6,50, US$12 and US$1,50 per square metre for office, retail and industrial space which were the averages for the year 2010. Average rent collection went up from 77 percent in the prior year to 90 percent for the reporting period ending December 31, 2011.
While this was a marked improvement, the company said the problem of debtors persisted hence an increase in the provision for doubtful debts from US$344 000 in 2010 to US$583 665 last year. Portfolio voids rose from nine percent in 2010 to 10,7 percent in 2011 largely due to the removal of non-performing tenants and strategic emptying of some properties, which will soon undergo renovation works.
Portfolio value increased from US$35,4 million to US$42,8 million, a capital return of 21 percent and a total of return 28 percent was achieved.
Going forward, Muvingi said the company would focus on debt collection to avoid write-offs.
"It is a debtor-ridden economy. If you are not knocking on your debtors' door to get your money if someone does it before you it might take a while to recover that money," Muvingi said.