Masholds back in the black

RYAN CHIGOCHE

Listed property investment and development company Mashonaland Holdings (Masholds), returned to profitability in the six months to June 30 2022 posting a profit of ZWL$1.5bn from a loss of ZWL$392m reported in the prior comparable period.

The improved performance was on the back of much improved occupancy levels from 79% to 83%.

Revenues also soared up 51% in the period under review to ZWL$709m from ZWL$471m reported in the same period last year.

The group maintained the rentals collection at 97% in the period under review.

The value of the property portfolio increased by 7% to ZWL$32.5bn from ZWL$ 30.5bn valuation at December 2021.

However, contributing significantly to the profits was the operating profit which increased by 204% from ZWL$263m to ZWL$800m

“The increase in operating profit was in part due to foreign exchange gains of ZWL$503m which were realised on foreign currency balances  held by the group following receipts of deposits on the disposal of Charter House,’’ board chairperson, Grace Bema said.

She said the sector was still subdued.

“The property market remains hamstrung by lethargic demand across all sectors of the market owing to low economic activity in the economy.

“The office sector remains subdued particularly in the central business district. The 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,’’ Bema said.

She also raised concern on the high interest rates associated with mortgage funding which she said was an impediment to growth in the residential sector given the consumers low disposable incomes.

The mortgage market has been weak as most buyers have to find the scarce foreign currency to acquire properties.

However the occupier submarket, retail, industrial sectors had a strong performance throughout the reported period as well as the tourism sector which benefited from the easing of pandemic restrictions which led to improved hotel occupancies.

Bema said Masholds will be focused on delivering all the planned projects as these will support cash generation strategy.

This, she said, remained the company’s main strategy to diversify the property portfolio as well as optimising portfolio performance to achieve sustainable business growth.