Mashonaland Holdings operating profit down 15pct, hit by rising voids

Mashonaland Holdings operating profit down 15pct,  hit by rising voids

HARARE, February 23 (The Source) – Property concern Mashonaland Holdings’ operating profit declined by 15 percent to $647,000 in the four months to January 31 due to rising voids and lower rentals, the company said on Thursday.

Rent reviews accounted for 70 percent of the total revenue reduction while occupancy accounted for the balance. Revenue for the period fell 14 percent to $1,6 million.

“Rent reviews and voids continue to be the major threat to revenue collection. The average decline in effective rent per square meter due to rent reviews was 15 percent. Most tenants are rationalising their costs in view of declining revenues, thereby reducing space or vacating to cheaper alternatives,” acting chief executive Letwin Mawire said in a trading update.

Portfolio occupancy marginally declined to 73 percent from 74 percent as at September 30, 2016.

Rental debtors went up by 10 percent to $2,1 million from $1,9 million in 30 September 2016.

Property expenses were six percent up to $521,000 due to voids and credit losses which accounted for 39 percent and 30 percent in that order.

Administrative expenses stood at $519,000.

Mawire said that the company is working on Ruwa and Westgate residential stands which will be developed upon receiving financial appraisals.

MashoHold completed a supermarket in New Houghton Park, Harare at a cost of $2,055 million which was already occupied.