Zimbabwe: Rentals Increase By 43 Percent

MASHONALAND Holdings Ltd's revenue surged 31% to US$7,4 million in the full year to September 30, 2012 buoyed by an upward review of rentals.

Report By Gamma Mudarikiri

Rentals in the period increased 43%.

Revenue in the period increased to US$7,4 million up from US$5,63 million recorded last year and was driven by an average increase in rentals portfolio which grew to US$6,39 per square metre compared to US$4,47 per square metre in the same period last year.

The office sector contributed 77% to total revenue, a marginal dropping from the 80% recorded in the period compared.

The overall portfolio yield for the year marginally increased to 8% compared to 7,3% recorded last year.

The industrial sector had the highest yield at 11%, followed by office and specialised service sectors both at 8%. The retail sector yield in the period dropped from 8% to 6% attributed to non-contribution in income from the vacant Rhodesville supermarket.

The group posted a net property income after administration expenses of US$5 million up from US$3,59 million, representing a growth of 40%.

Growth in net property income was largely driven by increases in rental income.

The fair value adjustment on the group's investment properties was US$13,89 million,reflecting a slower growth in property values up from US$20,12 million while investment properties grew 17% underpinned by the improvement in rental income.

In the period, the group's property portfolio value surged 17% to US$95,5 million up from US$81,4 million reported in the same period last year.

The company said portfolio replacement costs remained higher than market values.

"Total market value indicated an 18% discounted to the total depreciated replacement cost, compared to only 8% last year," said the company chairman Elisha Mushayakarara.

"This continued divergence between the two values for our portfolio and indeed for the whole market in general indicates market inefficacies."

Property expenses however grew to US$0,69 million, 10% higher than the US$0,63 million recorded in the period comparative.

The company said property management costs and voids-related operating costs continued to be key drivers of this expenditure.

Administration expenses marginally increased to US$1,98 million up from US$1,56 million.

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