Africa Moyo Property Reporter
The construction of Zimre Property Investments (ZPI)’s $13 million Sawanga Shopping Mall in Victoria Falls, is taking shape after the constructor, Masimba Construction, went on site and started work in January this year.
ZPI considered investing in the mammoth structure to optimise its portfolio mix. The project is anchored by one of the major retail chains, understood to be Pick ‘n Pay. It provides approximately 5 000 square metres of retail space, comprising of 23 shops of various sizes including banks, concept stores, food courts, a restaurant, coffee shops, jewellery and curio shops, a gym and a fuel service station.
ZPI expects construction of the shopping mall to be completed by January 31 next year. During a recent visit to Victoria Falls, The Herald Property witnessed Masimba workers busy working on the project. Reasonable ground has so far been covered with a number of pillars having been raised.
The bulk of the funds for the construction of the Sawanga Shopping Mall, will be generated from the sale of Zimre Centre in Harare. Zimre Centre was sold for $10,8 million as the property firm seeks to restructure its portfolio mix. Restructuring the property mix is one of ZPI’s strategic focus areas. As part of restricting its portfolio mix, ZPI also intends to convert Nicoz House Bulawayo to student accommodation.
The refurbishment of the Nicoz House Bulawayo is estimated to cost $1,8 million. Renovations started in January 2018 and is expected to be completed in August 2018. On completion, the property will provide approximately 194 beds, a canteen and student amenities at the lower floors.
Last year, ZPI’s rental performance was 11 percent performance lower than the prior year after recording $2,78 million for the year to December 31, 2017, compared to $3,14 million in 2016. According to the listed firm’s annual report for 2017, the decline was attributed to the general performance of the economy.
Investment properties were valued by independent valuers, Knight Frank at $34,6 million, representing a 2 percent decline from the $35,3 million in the comparative period.
The figure excludes Zimre Centre Harare. However, there was a marginal increase in the portfolio average yield from 7 percent in 2016 to 7,8 percent, while voids increased from 24 percent in 2016 to 26 percent.
Due to the unsatisfactory performance of rentals because of voids, ZPI’s revenue for the year to December 31, 2017 declined by 4 percent to $5,27 million from $5,52 million in the prior year.
Projects income for the year under review was $2,40 million, representing a 6 percent jump from the $2,27 million recorded in 2016. Given that ZPI embarked on a once-off employee rationalisation exercise and migrated to the total cost to company remuneration model that was completed during the year under review, administration expenses surged by 11 percent to $2,29 million compared to $2,07 million in the prior year.
Operating profit grew by 215 percent to $1,80 million from a loss of $1,57 million achieved in the year earlier. Given a negative fair value adjustment on investment property of $0,70 million recorded as at December 31 last year compared to the $2,81 million negative fair value adjustment in 2016, the firm posted a profit of $2,49 million. In 2016, ZPI had recorded a loss of $1,45 million