Property & Infrastructure

Old Mutual pursues CBD properties conversion


Financial services group Old Mutual Zimbabwe is plan­ning to convert some of its properties in the central business district to ac­commodation. This comes as its void levels are hovering around 25 percent.

Old Mutual chief executive Jonasi Mushosho told Business Times that the group is pursu­ing change of use for some of its properties in the CBD.

“Most of our CBD buildings are not empty, but most of our buildings do have some voids. Across our portfolio, our void level is below 25 percent so in some of the more important lo­cations we are full.

However there is need for CBD renewal.

He said major real estate players continue to seek re­duction of exposure from un­der-performing properties in the CBD while some pursue change of use and mixed use as a solution.In the sector, Zimre Property Investments (ZPI) offloaded Zimre Centre in the Harare CBD from its portfolio and invested the proceeds in Victoria Falls (Sawanga Mall). ZPI also converted NICOZ House in Bulawayo to student accommodation. More recent­ly, Mashonaland Holdings an­nounced it will be converting Charter House into a hotel.

Old Mutual is now looking at constructing a state of the art hospitality property in Victoria Falls and a business complex in Hwange.

“It seems the new frontier in terms of real estate develop­ment is the hospitality Industry and support services (retail and office in resort areas).

The question is what is at­tracting investment in that sub-market which has been achiev­ing very low yields throughout dollarisation,” said a real estate analyst.

In F18, Old Mutual posted a 37 percent increase in profit to $329,8m from $242,9m driven by revenue growth recorded across the group’s operations.

Total revenue for the period under review was up 41 percent to $1,4bn from $991m on the back of growth in all main rev­enue lines.

Net client cash flows for the group were at $166,2m during period while net loans and ad­vances were at $780,5m.

Gross written premiums grew 10 percent to $214,1m from $194m for the life and short term insurance business due to a combination of im­proved client retention and new business that was underwritten. The banking business recorded a profit of 17 percent to $49,2m up from

$42,1m in 2017. This was due to growth in net interest income by 19 percent from a combination of growth in loans and advances and improvement in net interest margin.

Funds under management for the asset management busi­ness were up 52 percent to $4,1bn from $2,7bn due to a combination of growth in net client cash flows and positive investment performance.

Mushosho told analysts that the retail market offered oppor­tunities for the growth for the group during the period under review.

“In the past five years there has been consistent growth in our profitability notwithstand­ing the volatility of economic environment,” said Mushosho.

“Strong operational growth was delivered across the group and we are a capitalised business to withstand turbulent times,” said finance director Takura Mudekunye.

In the outlook, Mushosho said the operating environment will remain challenging but de­spite the challenges, the compa­ny will leverage on the opportu­nities that will arise.

He added that revenue gen­erated will enable the group to meet all capital expenditure de­mands denominated in foreign currency

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