Home / Business / ZPI contemplates more projects next year

ZPI contemplates more projects next year

Fradreck Gorwe
Zimbabwe Stock Exchange-listed real estate concern, Zimre Property Investments (ZPI) intends to introduce more projects in 2020 as part of the firm’s value preservation strategy and efforts to stay afloat during turbulent times.

The real estate company is already benefiting from recently completed projects such as Sawanga Mall in Victoria Falls and Nicoz House Bulawayo, both of which currently contribute significantly to the company’s revenue streams as well as delivering value to shareholders.

Nicoz House’s student accommodation facility reportedly ‘’reached full capacity in terms of student intake.”

Said company secretary Nyasha Zhou in a statement accompanying a third quarter trading update to September 30, 2019; “The economic outlook for the remainder of the year into 2020 remains uncertain. The company’s thrust in the short-term is to survive the turbulent times and preserve value for shareholders.

“Over the years the company has acquired a number of strategic pieces of land that provide a springboard for future growth and from which a number of projects will be launched in 2020.”

ZPI’s financial performance for the third quarter was commendable despite a rather problematic operating environment characterised by worsening liquidity situation, foreign currency inadequacy, electricity and fuel shortages, and inflationary pressures.

The challenges in turn effected a dismal portfolio performance with resultant low disposable incomes curtailing demand for real estate products as well as fuelling a decline in rental revenue.

“Demand for real estate products declined during the period under review due to the tight liquidity situation and waning consumer purchasing power. Rental revenue declined in real terms and debtors remained a major problem for the business as the general economic environment increased overall tenant default risk. Building costs escalated driven by the price increases witnessed in the market,” said Mr Zhou.

Notwithstanding the above negatives, the company achieved an operating profit of $5,91 million for the nine months to September 30, 2019. Rental income had increased to $3,27 million from $1,63 million in prior year comparative. Stand sales realised positive revenue growth to $2,93 million against $0,46 million in the same period prior year.

Growth in rental income and stand sales revenue was respectively a result of quarterly rent reviews and the diversification strategy.

Both strategies are employed with a motive to preserve “income and capital values”.

The diversification strategy entails the reconfiguring of some of the company’s space for other uses in line with market demand.

“The company has taken the approach of making timely disposals of stands in line with its cash flow requirements while intensifying debtors’ recoveries,” said Mr Zhou.

Among other positive indicators, voids fell from 28 percent to 22 percent in the quarter due to “continuous space reconfiguration” and the achievement of new lettings.

Source :

The Herald

Check Also

Zimbabwe: Water Shortages Hamper Bulawayo’s Coronavirus Fight

The Bulawayo City Council’s (BCC) capacity to curb the spread of the coronavirus is being …