• The Company said there was limited development on the property market due to rapid depreciation of local currency
  • The Zimbabwe dollar continues to depreciate at unanticipated pace despite a busload of economic measures to stabilise it
  • The Company recorded over 500% increase in revenue

Harare- First Mutual Properties a subsidiary of First Mutual Holdings which specialises in the development and management of commercial properties says the rapid depreciation of the local currency remained a stumble to the property market’s prowess during the three months to 31 March 2023. 

In a trading update, the Company said due to the rapid depreciation of the local currency, different parties have resorted to either using purely United States Dollar rental rates or quoting in purely Zimbabwean Dollar currency having converted the rentals at the alternative market rates making the field uncompetitive. 

“There continues to be limited development activity on the property market being affected by the depreciating local currency and limited access to financing, with the majority of developments being mainly in the industrial/retail warehousing sectors,” the Company said in a trading update. 

During the three months, the local currency depreciated against the US$ as foreign currency exchange rates fell by 35.9% using the Dutch auction interbank exchange rate and 35.3% on the alternative market.

Since January 2023, the Zimbabwe dollar has depreciated by over 35% within six months and the currency is expected to decline further due to reactionary policy measures by the Central Bank and Treasury. 

The occupancy level fell to 84.55%, mainly attributable to net lettings in the CBD office sector.

“In the near future, the primary objective is to safeguard the value and manage cash flow, as fluctuations in the market caused by currency devaluation have the potential to cause major disruptions,” added the Company. 

However, the Company pocketed a revenue increase of 554.26% to ZWL1 billion from ZWL200 million in the comparative 2022 period, driven by rent reviews and improved pure US$ business. 

Net property income increased by 485.39% to ZWL493 million from ZWL84 million due to improved levels of rental income which is the main component of the revenue. 

The company said ZWL51,598,333 million was applied to property maintenance during the quarter. Investment properties on 31 March 2023 were valued at ZWL 137.007 billion, a 25.31% fair value gain from the 31 December 2022 value of ZWL 109.334 billion. 

The growth was driven by rental income growth.

An interim dividend of ZWL20,6 million (being 1,667 ZWL cents per share) and an additional USD 12,496 (being 0,001011 United States cents per share) was declared from the profits for the quarter ended 31 March 2023. 

The dividend will be payable on or about 19 June 2023 to all shareholders of the Group registered at the close of business on 2 June 2023.

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