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Harare Bureau
ZIMRE Property Investments performance in the six months to June saw revenue decline 17 percent after a drop in rental income and a fall in projects sales.
Revenue for the half year was $2,91 million from $3,51 million during the same period last year while projects income for the period amounted to $1,06 million down from $1,55 million in the same period last year.

After tax profit retreated by 29 percent to $802,165 in the six months from $1,1 million in the prior year.

Portfolio voids shot up by 69 percent to 20 percent from 11,8 percent in the same period last year as rent defaults continued to increase.

The company has witnessed a rise in rent defaults and the debtors’ book going up. There have also been increased requests for rent reductions.

“Tenants are coming to ask that we reduce rentals, some are opting for smaller space and that creates voids. Because of this we have witnessed a significant rise in voids. We have also witnessed increased surrenders or termination of leases,” said ZPI manager Stephen Kapfunde.

“We have employed strategies to contain the growth of these voids and those strategies are working.

“My projection to year end is that that figure will be less than 20 percent,” Kapfunde.

The company sends final demand for the first 30 days rent default and hands over defaulting tenants after 60 days.

Average rentals fell during the six months with retail going down to 4,34 percent from 15 percent per square metre and office space going down $5,90 per square metre from $7 per square metre.

ZPI’s property portfolio declined five percent to $1,84 million in the period under review from $1,94 million in the comparative period.

The company is looking to commence a new development, Zimre Park Extension in Ruwa next month on 603,795 square metres of land.

The project will consist of 238 residential stands measuring between 600 and 800 square metres each.

About $5 million, split between equity and borrowings, will be injected into the project with an expected return of 38 percent or $1,9 million.

Uptake at Zimre Park in Masvingo is slow having grossed $600,000 between January and August this year.

“We have managed to sell 30 stands to date so we are pleased with the performance of this project overall and we think we will achieve the expected return of 40 percent on the value of this project.

It has actually edged closer to the sales that we achieved for the entire year last year,” Kapfunde said.

The Parklands project in Bulawayo has grossed $200,000 from the sale of 14 stands between January and August. The company has recovered 100 percent of the cost put into the project.

The company said it is now targeting short cycle projects as opposed to high end projects.

“Going forward for ZPI is about short cycle projects where people can go to the bank and get a loan based on the salary.

“Anything larger and high income you are likely to struggle with it,” said Edson Muvingi ZPI chief executive.