Mashonaland Holdings has alluded that the property market remains hamstrung by lethargic demand across all sectors of the market owing to low economic activity in the economy.
In a statement accompanying results, Mash Holdings board chairman Eng. Grace Bema said, “Whilst the COVID-19 restrictions eased during the period under review, the prevailing global headwinds and internal fiscal and monetary policy issues have further delayed full economic recovery.”
However, despite the faltering economic activity, the occupier submarket’s retail and industrial sectors have remained relatively resilient and the tourism sector has also been positively impacted by the easing of COVID-19 restrictions leading to an improvement in hotel occupancies.
The group said office sector however remains subdued, particularly in the CBD, with new lettings being recorded through innovative solutions providing flexible and miniaturised office space.
“Development submarket is the most affected as construction costs remain on an upward spiral in both currencies. As a result, the sub market continues to be dominated by residential property projects and a few small-sized commercial developments.
“The high interest rates on mortgage lending coupled with declining disposable incomes however continue to act as hindrances against further growth in residential sector developments,” Eng. Bema said.
In this economy, middle to high income residential properties continue to present investors with an avenue for value preservation as the inflation trend remains uncertain. The high demand against a static supply has seen property values in this market segment going up.
Hence the construction firm has continued with its various property development projects which include stand 489 Pomona, industrial retail development.
“The group completed the acquisition of the 4ha Pomona property in the first quarter of the year. The Group has since appointed a full project team to work on the designs and requisite statutory approvals. The Group is targeting to commence construction works in October 2022,” she added.
Mash Holdings said an anchor tenant has been identified for the development project and has signed an Agreement to Develop and Lease (ADL).
An update on the Mashview Gardens project was availed and the group completed construction work on the 1st phase of the Mashview Housing in August 2022 and has since commenced works on phases 2 and 3 of the project. The project is targeted for completion in the last quarter of the year.
Windsor Park Ruwa residential stand sales the group at the end of June had concluded agreements of sale for 15 of the 24 fully serviced medium density residential stands in Windsor Park, Ruwa.
“Funds raised from the disposal of these stands are anticipated to create further liquidity to support other strategic development works,” Eng. Bema added.
“The Government of Zimbabwe has revised downwards the country’s economic growth forecasts from 5.5% to 4.6% in line with global economic trends. In addition, authorities expect inflationary pressures to subsist over the short term before measures being implemented begin to bear effect.
“Despite these developments, the group remains focused on delivering on its projects pipeline which will support cashflow generation to enable portfolio diversification,” she added on their outlook.
The group’s strategic focus will also remain targeted at portfolio performance optimisation, portfolio diversification and increasing operational efficiencies to ensure sustained business growth.
The Board declared an interim dividend of ZW$141,782,393 or 8.401 cents per share. A notice will be published to this effect – Harare