Property investment and developer, First Mutual Properties Limited revenue for the first quarter to March 2021 grew 411 percent compared to the same period in the prior year to reach ZWL$ 90,172 million, driven by rent reviews, higher turnover rentals and the occupancy level.
The property market continued to experience low demand for space, with the CBD Office sector worst affected, while the retail and industrial segments of the market remained resilient with steady demand.
Net property income grew at a slower rate of 331 percent during the period due to reinvestment in repairs and maintenance, to improve space quality and accelerate leasing effort, the company said in its latest trading update.
Occupancy levels moved up by 2 percentage points to 89 percent from same period prior year levels, “mainly attributable to net lettings in the CBD office and retail sector,” said First Mutual.
A total of ZWL 7.037 million was spent during the quarter on property maintenance, while the business remained focused on accelerating digital strategies and talent retention.
Investment properties at 31 March 2021 were valued at ZWL 9.663 billion following a Directors valuation, representing a 3 percent increase from 31 December 2020.
The lockdown early in the year delayed rent review efforts, hindered collections and planned maintenance initiatives.
“Collections deteriorated during the period to 57% (December 2020: 78%) as tenants were affected by the lockdown in generating income to service their obligations,” said the company.
Going forward, the company expects rental yields to remain weak due to the slow nature of price discovery of rentals, coupled by limited upside on rentals due to excess supply of space, while recent revaluations of properties will apply pressure to any growth in yields.
The Group finalized a contract to implement a solar energy project at First Mutual Park during the quarter, with the procurement of materials initiated, with delivery expected in the second quarter of 2021.
The solar system is expected to be operational in third quarter of 2021.