NSSA offloads loss-making hotel

LIVINGSTONE MARUFU

The National Social Security Authority (NSSA) is planning to dispose of its loss-making Beitbridge Hotel for about US$6m, as the State-owned pay-as-you-go pension scheme moves to offload non-performing assets weighing on investment returns, Business Times can report.

The hotel has been largely non-operational as a commercial establishment since 2016 after years of sustained losses and weak occupancy. It is currently used mainly to accommodate government offices, generating little value for the pension fund.

NSSA chief executive officer Dr Charles Shava told Business Times that the authority could no longer justify retaining the asset after nearly a decade of underutilisation.

“We are selling the Beitbridge Hotel because it is no longer viable for us to keep it,” Dr Shava said.

“We have obtained three independent valuations. Two valued the hotel at US$3.5m each, while the third came in at US$12m. Based on the average valuation, we have set an asking price of around US$6m.”

He said the Authority had resolved to dispose of the property as it continued to drain resources without generating meaningful returns.

“We have made a decision that this facility should be sold because it is bringing nothing to the Authority except costs,” Dr Shava added.

The disposal forms part of NSSA’s broader strategy to unlock value from underperforming investments and strengthen returns for pension contributors and beneficiaries.

Over the years, various stakeholders have proposed converting the idle hotel into a tertiary education institution or a mixed-use commercial complex, but none of the proposals has materialised.

The Beitbridge Hotel is among several investments that have failed to deliver expected returns despite significant capital injections by NSSA. The authority had invested in the property under arrangements that envisaged repayment at 10% interest over five years, but persistent losses made that target unattainable.

NSSA owns a property portfolio of about 111 properties across Zimbabwe and is reviewing several underperforming assets as part of its investment rationalisation programme.

“We have a number of facilities that have become liabilities rather than assets, and we intend to dispose of them once the Beitbridge Hotel transaction is concluded,” Dr Shava said.

The authority has already begun repositioning parts of its property portfolio to improve returns.

Among the initiatives is the redevelopment of Borrowdale Country Manor into a multi-functional conference centre to maximise the commercial value of the asset.

The latest disposal drive comes as NSSA seeks to strengthen governance over its investments following years of criticism over poor-performing assets. The authority says it has a fiduciary obligation to safeguard contributors’ funds and generate sustainable returns for pensioners, widows, orphans and other beneficiaries.

Industry stakeholders have long urged NSSA to monetise dormant properties rather than allow them to remain idle, arguing that productive real estate investments would help preserve the fund’s value against inflation while improving long-term pension sustainability.

In recent years, NSSA has accelerated efforts to commercialise its land bank and restructure non-performing investments as part of a wider strategy to boost investment income and enhance returns for contributors.

The pension fund says its investment approach remains anchored on its core mandate of generating sufficient income to pay sustainable pensions to Zimbabwe’s workers after retirement.