Mashonaland Holdings posts 18% operating profit
By Edward Mukaro
PROPERTY giant, Mashonaland Holdings remains focussed on its strategic priorities which include portfolio diversification and portfolio optimisation to sustain overall business performance on the backdrop of a 37 percent revenue increase which contributed to the firm’s Operating Profit of 18% to stand at $184 479 115 for the 12 months ended 31 September 2021 compared to the prior year.
In a statement accompanying the company’s financial results, the property concern said, “Revenue increased by 37% compared to the same period last year driven by periodic rent reviews which the business has been performing in line with market practice. The improved revenue performance was also driven by new leases concluded during the period. Occupancy levels have increased by 2% from 79.2% to 80.6%.
“Operating profit increased by 18% due to the revenue growth, the operating profit margin, however, decreased by 14% following an increase in total operating expenses. Increase in operating expenses was driven by movement in unofficial market exchange rates, which had a bearing on the Zimbabwe Dollar value of maintenance materials and services consumed by the company. The company increased its investment in maintenance activities in an effort to retain occupancies and also to attract new lettings,” stated the firm.
The company was, however, delighted by the occupancy in the retail sector during a period where the property sector suffered setbacks due to low demand for office space, especially in the central business district.
“The property market remains susceptible to low demand for space particularly in the CBD office sector due to low economic activity. The market has however recorded improvements in occupancies for the retail sector as the economy mirrors its retail concentration. The industrial sector has remained resilient with average yields of 8% across the market as well as occupancies above 90%. On the supply side of the property market, the dominant sector has been the residential sub-sector which continues to attract new development activity due to the high demand for residential space and also the low risk given the sizes of residential units.”
Mashonaland Holdings is encouraged by the positive economic growth projections and anticipates that such development contributes towards improved demand in the real estate occupier market.