BUSINESS REPORTER
Listed property investment and development company Mashonaland Holdings (Masholds) has acquired two pieces of land measuring four- hectares each in the capital Harare, as part of efforts to beef up its portfolio.
Masholds board chairperson Grace Bema said the company plans to develop a wholesale centre in Pomona and an office park along Borrowdale road.
“The group has acquired a four-hectare site in Pomona for the development of a wholesale centre. The pre-construction phase works including design development, environment impact assessment approvals, building plan approvals, and tendering are almost complete.
“The group also acquired a two-hectare along Borrowdale road for the development of an office park as part of the group’s diversification and growth strategy,” Bema said.
She said the group also group completed construction works on the first phase of Mashview Gardens cluster housing development and is set to complete construction work on phases 2 and 3 in the second quarter of 2023.
All 25 units were pre-sold before the development.
Bema said the Milton Park Day Hospital construction works were progressing in line with the construction programme and are set to be completed in August 2023.
The company swung to a profit of ZWL$17.2bn in 2022 from a loss of ZWL$4.8bn in the previous year due to improved operating profitability and capital gain recorded on investment properties.
Masholds top-line for the year increased by 98% to ZWL$3.8bn in 2022 from ZWL$1.9bn due to revenue from Mashview Garden Cluster housing development amounting to ZWL$1.2bn, which contributed 30% of the revenue performance.
Rental income increased by 34% to ZWL$2.6bn, despite the comparable period being longer following the change of the financial year in 2021, thereby contributing to the improved revenue performance.
The group’s investment properties were valued at ZWL$68bn on December 31, 2022, the valuation represents a 39% capital gain for the year.
The capital gain was achieved through the group’s periodic rent reviews to hedge against rising inflation as well as firming values for the group’s strategically located land banks.
The company has turned to retail and suburban office parks to hedge against inflation.
The shift to retail and suburban office parks comes at a time when the rental growth for the central business district office lagged behind inflation.
Bema said demand-driven inflation in the past has boded well for real estate in terms of hedging against inflation, supply side shocks, such as an increase in food and oil prices are more difficult to hedge as tenants’ rent-paying capacity is invariably impaired.
“The occupier sub-market is expected to continue endearing itself with the informal sector, through among other measures, reconfiguring of low-rise buildings in the central business district into small to medium enterprise miniaturised retail facilities as demand for such facilities remains positive,” she said.
Bema said the company came up with some frequent rent reviews, indexation, and charging of rentals in United States dollars as the redollarisation in the economy increases, as some of the measures the occupier submarket has adopted to ensure inflation hedging.
She said Masholds’ strategic focus will remain that of targeting to deliver on its long-term strategy which is hinged on portfolio diversification and increasing operational efficiencies to ensure sustained business growth.
