Property firm, Mashonaland Holdings Limited is set to commence several of its property development projects in first quarter (Q1) -2021 following delays encountered from the COVID-19 lockdowns and a difficult economic environment.
Year on year Inflation peaked 834 percent in July making it difficult for business viability and planning.
In its consolidated financial update for the full year ended September 30, 2020 the company said it will embark on its low risk projects despite headwinds in the sector.
“The Charter House reconfiguration to a boutique hotel was equally delayed by the pandemic with onsite works now targeted to begin in Q1 2021. However, the Bluff Hill cluster housing project is set to commence following the conclusion of the tender process,” said Company chairperson Grace Bema.
“Construction of a model house for this project is scheduled for completion in Q1 2021. All the bricks required to complete the development have been procured and delivered on site,” added Bema.
The company also said work on mixed use subdivision of Lot C, Galway Estate, Ruwa Township is underway.
Mashonaland Holdings has a rich portfolio of properties that include ZB Life Towers in Harare, where its headquarters are also located, all ZB centres across the country, West End Clinic, Express Stores in the capital, Charter House, Bluffhill Industrial Park, Rhodesville Supermarket, Simon Mazorodze Industrial Property, Houghton Park Shopping Centre, Ryelands Properties in Sam Levy and Ronica Mews.
However, high construction costs remain the biggest worry for the property developers under the current environment.
“At the same time, building maintenance costs have risen sharply as contractors are indexing costs to the United States Dollar based on the parallel market rate. The limited number of projects has also resulted in higher contractor charges in the absence of economies of scale,” said Bema.
Meanwhile, the company was resilient during the course of 2020, posting a revenue increase of 30 percent from ZWL$133 million in prior year to ZWL$ 173 million.
The growth in revenue is mainly attributed to the rent reviews implemented during the year and growth in occupancy levels from 77 percent to 79.2 percent as the company remained focused on tenant attraction and retention strategies.
Operating expenses to revenue ratio marginally improved from 50.3 percent to 50.1 percent as Management exploited cost save opportunities to protect profits.
