PUBLICLY-LISTED property firm Mashonaland Holdings’ after-tax profit for the full year to September declined to $9,8 million from $17,2 million posted in prior year, the company has reported.
Fair value investments for the period under review stood at $6,2 million relative to $13,8 million recorded in 2012.
In a statement accompanying the company’s results, group chairperson Elisha Mushayakarara said the fair value adjustments on the group investments properties stood at $6 million due to rent reviews in the market.
“The 8%growth in investment properties was driven by rent reviews to the market,” he said.
Group revenue marginally rose to $7,7 million during the period under review from $7,4 million the previous year while operating expenses were 10% lower than last year at $0,84 million.
Mushayakarara said property management cost and voids-related operating costs continued to be the key drivers of the expenditure.
Administration expenses were at $2,2 million from $1,74 million in 2012 increasing by 27% from prior year. The administration expenses to income ratio increased to 29% from 24% in 2012.
“Vacancy levels closed at 15% from 8% in 2012 as tenants continued to either downsize or relocate to cheaper premises outside the central business district. The arrears to revenue ratio grew marginally to 11% from 9% in 2012 as tenants struggled to meet their rent obligations, especially during the second half of the financial year,” Mushayakarara said.
He said during the period under review, the macro-economic environment was subdued with persistent liquidity constraints and low capacity utilisation levels impacting negatively on the economy.
“During the year under review, the lack of affordable mortgage finance curtailed activity in the residential sector.
“Moreover, the low participation of foreign investors exacerbated the liquidity challenges. The weakening economy put pressure on occupancy levels, resulting in marginal rental growth and low collections,” he said.