Performance in the real estate sector is experiencing a negative impact emanating from increasing stock of unoccupied industrial properties on the back of subdued economic activity, this is according to listed entity TSL Limited.
Speaking at the Group’s results briefing last week, TSL CEO Washington Matsaira, said the property sector’s performance had been affected by higher levels of voids and margin compression.
“The real estate cluster was impacted by an increase in the stock of unoccupied industrial buildings, which were again a consequence of the difficult economic environment,” said Mr Matsaira.
Revenue for TSL’s real estate businesses amounted to $3,8 million down from $4,7 million prior year comparative.
Profit for the period also came out lower at $1,6 million down from $2,1 million prior year comparative.
Mr Matsaira, however, said the Group was happy with the out-turn saying it was “satisfactory revenue and profit performance”.
TSL owns investment properties worth $36,2 million. Total value for the Group’s operating assets amounts to $56,1 million up from $54,2 million.
TSL is working on the development of its Vorstermans industrial complex with the first phase now at an advanced stage.
Work done to date include the construction of three new warehouses, expanded container yard and supporting roads and drainage works.
The second phase is expected to commence in the second half of 2018.
Mr Matsaira also said the Group is looking at upgrading key properties to bring them in line with international standards.
The country’s property sector has been affected by downward adjustments of rentals in response to the market.
Tenants have also resorted to reducing space as they try to cut down on costs, while others are surrendering space due to reduced economic activity.
TSL, which also runs warehouses under the Logistics’ business, has also been affected by low demand for storage space amid a reduction in imported products.