First Mutual Properties weighs ZSE delisting

BUSINESS REPORTER

First Mutual Properties (FMP) is evaluating a potential transaction to delist from the Zimbabwe Stock Exchange (ZSE), in a strategic shift that signals growing dissatisfaction among corporates over value realisation on the local bourse, Business Times can report.

The property group’s deliberations follow a wave of high-profile exits from the ZSE, most notably by telecoms giant Econet Wireless Zimbabwe, which voluntarily delisted after trading at a significant discount to its regional peers.

Hospitality group African Sun Limited has also migrated from the ZSE to the Victoria Falls Stock Exchange (VFEX), while companies such as National Tyre Services Limited, Truworths Limited and National Foods Limited have recently exited the market.

Company secretary Dulcie Kandwe confirmed that the process is already underway.

“The board of directors of First Mutual Properties Limited wishes to advise shareholders and the investing public that the company is currently engaged in negotiations and/or evaluating a potential transaction to delist from the ZSE, the outcome of which may have an effect on the price of the company’s securities.

The transaction is still at a preliminary stage and remains subject to the conclusion of negotiations, execution of definitive agreements, and the receipt of the necessary regulatory and shareholder approvals, where applicable,” Kandwe said.

She urged shareholders and the investing public to exercise caution when dealing in the company’s securities until a full announcement is made.

FMP said it will issue further updates in compliance with ZSE Listings Requirements as and when material developments arise.

FMP’s potential exit has caught the market off guard, particularly as the group has been among the top five capital raisers on the ZSE in recent months.

The company staged a notable financial recovery in its third-quarter trading update for the period ended 30 September 2025, returning to profitability after last year’s debilitating investment property losses triggered by the shift in Zimbabwe’s functional currency.

Kandwe said the rebound was largely anchored by stronger net fair value adjustments across the group’s investment property portfolio.

The group reported a consolidated profit after tax of US$1.8m for the period ended 30 September 2025, a sharp turnaround from the US$60.3m loss recorded in the prior year.

Total assets edged up 1% to US$138.2m from US$137m as at December 31, 2024, while total liabilities declined 2% to US$20.8m from US$21.2m, underscoring gradual balance sheet strengthening.

Rental income rose modestly by 2% to US$6.6m during the nine months to September, reflecting a slow but steady recovery in demand across the group’s commercial portfolio.

More significantly, the company recorded US$1.4m in fair value gains on investment property — a dramatic reversal from the US$54.9m fair value loss posted in 2024.

Despite signs of relative stability, Kandwe cautioned that the operating environment “remained complex and dynamic, characterised by a growing cash economy.”

She noted that the US dollar continues to dominate across most sectors of the economy, particularly within the rapidly expanding informal sector.

This shift is evident in FMP’s revenue profile. US dollar-denominated income accounted for 86% of total revenue for the period ended 30 September 2025, up from 76% in the comparable period in 2024, highlighting the deepening dollarisation of property transactions.

Zimbabwe’s property market is also undergoing structural changes.

Rising diaspora inflows — largely cash-based — have intensified demand for secure, gated residential developments, pushing up values in premium suburbs such as Borrowdale and Mount Pleasant. These areas continue to attract capital, partly due to integrated solar and water back-up systems that mitigate the impact of erratic public utilities.

On the commercial front, new developments are increasingly concentrated in mixed-use facilities, office parks, retail hubs and leisure-oriented properties. Investors are targeting tenants seeking modern, energy-efficient premises that align with evolving corporate sustainability standards.

Against this backdrop, FMP’s potential delisting raises broader questions about the attractiveness of the ZSE as a capital-raising platform and whether more firms will seek alternative listings or private structures to unlock shareholder value.