HARARE, February 26 (The Source) – Property firm Mashonaland Holdings says revenue for the four months to January fell 17 percent to $2,1 million as demand for office space tapers off and plans to develop its residential properties to boost income.
Occupancy levels declined by 22 percent to 23,863 square metres compared to the same period last year.
“The rental market has stagnated, and is likely to remain subdued for the rest of the year. Therefore, tenant retention will remain one of our top priorities,” chief executive Manfred Mahari told shareholders at an annual general meeting on Thursday.
However, he said, the company would pursue new revenue streams through developing residential properties.
“We have since commenced on projects to unlock value on existing land banks. Trading of development stock from these projects will improve revenue streams,” he said.
Rental debtors grew slightly to $1,8 million from last year’s $1,7 million although Mahari said management was ensuring that arrears remained under control.
Operating profit stood at $1 million down from $1,2 million period last year but was in line with budget.
Property expenses, mainly made up of costs related to voids, provision for credit losses and property management costs, at $491,100 were up 63 percent compared to prior period but two percent below budget.
However, the company recorded a 33 percent decrease in administration expenses to $700,000.
The completed office building along Natal Road in Avondale is expected to generate $400,000 annually.
A new property acquired in the low density suburb of Belgravia would be developed into an office park.
Housing projects underway are in Mabelreign, Greendale, Westgate and Hazeldean at an estimated cost of $19 million. The cost of a housing project in Ruwa is yet to be determined.
“Construction of Mabelreign is expected to commence during the first half of the calendar year. The other projects will be commenced sequentially after completion of Mabelreign,” Mahari said, adding that various funding options were being pursued.