First Mutual Properties says it will actively seek new tenants and improve space quality in line with occupier requirements to sustain occupancy levels and earnings.
In a first quarter trading update, the company said the lockdown early in the year delayed rent review efforts, hindered collections and planned maintenance initiatives.
“Despite the slow start to the year the occupancy level improved by 2% to 89 % as deliberate efforts to improve space quality continues to yield positive results,” it said.
“Collections deteriorated during the period to 57% as tenants were affected by the lockdown in generating income to service their obligations.”
It said the property market continues to experience low demand for space, with the CBD Office sector worst affected, while the retail and industrial segments of the market remained resilient with steady demand.
Revenue increased 411% compared to the same period in the prior year, driven by rent reviews, higher turnover rentals and the occupancy level rising to 89%, mainly attributable to net lettings in the CBD office and retail sectors.
Net property income grew at a slower rate of 331% during the period due to reinvestment in repairs and maintenance, to improve space quality and accelerate leasing efforts.
A total of ZWL7.037 million was spent during the quarter on property maintenance, while the business remained focused on accelerating digital strategies and talent retention. Investment properties at 31 March 2021 were valued at ZWL 9.663 billion following a Directors valuation, representing a 3% increase from 31 December 2020.
The property market continues to experience low demand for space, with the CBD Office sector worst affected, while the retail and industrial segments of the market remained resilient with steady demand. The office park sector continued to display its resilience with steady demand.
FMP finalised a contract to implement a solar energy project at First Mutual Park during the quarter, with the procurement of materials initiated, with delivery expected in the second quarter of 2021. The solar system is expected to be operational in the third quarter of 2021 – Harare