• The property group's Q1 2026 update is a picture of steady improvement against a backdrop of genuine development momentum. The 445 stand Shurugwi project starting off-plan sales in Q2 is the most consequential forward
• Mashonaland Holdings reported an 8% increase in Q1 revenue to US$1.86 million and a 20% rise in operating profit before fair value adjustments to US$879,222, supported by improved occupancy and higher rental yields
• Portfolio occupancy improved to 89% from 87%, while collection rates remained stable at 92%, with new lettings at Pomona Commercial Centre and the expanded Chiyedza House SME Centre supporting performance
• The key forward-looking driver is the development pipeline, especially the 445-stand Shurugwi Impali project, where off-plan sales are scheduled for Q2 2026, alongside the 30-unit Greendale residential development where construction has commenced

Harare- Mashonaland Holdings Limited has reported an 8% increase in revenue to US$1.86 million and a 20% increase in operating profit before fair value adjustments to US$879,222 for the quarter ended 31 March 2026, driven by improved occupancy across the portfolio and higher rental yields.

The property market demonstrated resilience, with rental yields averaging between 8% and 10% in targeted sectors and occupancy lifting to 89% from 87% in the prior year.

This comes after a period in which the group has been actively expanding its commercial portfolio through new lettings at Pomona Commercial Centre and the recently expanded Chiyedza House SME Centre. Both facilities contributed to the occupancy improvement, with the group noting that collection rates remained stable at 92%, indicating consistent tenant payment performance.

The most consequential forward-looking disclosures are two property development projects that move the group beyond its existing portfolio management activity into active development of new residential and commercial assets.

At 126 Coronation Drive in Greendale, the group is developing 30 semi-detached double-storey residential units for resale. Pre-construction processes have been completed, all statutory approvals have been secured, and construction has commenced with civil works currently in progress. This is a direct response to the demand pattern the group identifies in the property market commentary, which describes demand shifting towards decentralised suburban and peri-urban developments with increased uptake of cluster housing and serviced stands.

The Shurugwi Impali stands project is larger and more geographically significant. The project entails the development of 445 medium-density residential stands, site surveying has been completed, and stands have been pegged. Off-plan sales are scheduled to commence in Q2 2026. A 445-stand development in Shurugwi represents a substantial residential supply injection into a secondary urban market where formal residential development has historically been limited. The off-plan sales launch in Q2 will be the first tangible test of whether demand in that market is deep enough to absorb supply at the pace the group requires for project viability.

The group's description of the property market environment is one of the more useful sections of any quarterly update published in the Zimbabwe property sector, because it goes beyond generalities to describe specific demand dynamics with measurable parameters.

Capital values increased by approximately 2% to 3% in selected segments during the quarter, with performance described as uneven. Well-located, serviced developments continued to outperform older CBD office stock and less competitive assets. This divergence reflects a market in which location quality and infrastructure self-sufficiency, specifically solar energy and reliable water, are increasingly the primary determinants of asset value rather than building age or size alone.

The demand shift towards self-sufficient developments incorporating solar energy and reliable water infrastructure is a rational economic response to the infrastructure deficits the group itself identifies, including ongoing public sector infrastructure delivery constraints that have increased reliance on self-funded solutions such as boreholes, solar systems, and private sewerage infrastructure. Developments that internalise these infrastructure costs command a premium over those that depend on public utilities. This dynamic has direct implications for Mashonaland Holdings' development programme: both the Greendale apartments and the Shurugwi stands will need to address infrastructure self-sufficiency to compete effectively in the current demand environment.

Rental yields averaging 8% to 10% in targeted sectors are attractive relative to alternative asset classes in Zimbabwe's current interest rate environment, which is part of why property continues to attract both local and diaspora capital. The diaspora buyer dimension is specifically noted by the group as a demand contributor, reflecting the broader pattern of diaspora remittances flowing into Zimbabwe's real economy that multiple companies across sectors have identified as a structural demand support in the current period.

Occupancy at 89% against 87% in the prior year was a 1 percentage point improvement that, on a portfolio valued at US$94.77 million at 31 March 2026, represents a material revenue difference. The collections rate of 92% held stable from the prior year, indicating that the tenant quality and lease structure across the portfolio is supporting reliable cash conversion of rental income.

Operating profit before fair value adjustments growing 20% on 8% revenue growth reflected cost containment that is producing operating leverage. When revenue grows faster than costs, the incremental revenue flows disproportionately to operating profit. The group attributed this to effective cost containment measures, a formulation that covers a broad range of operational disciplines but which, in a property management context, primarily refers to maintenance cost optimisation, administration efficiency, and the absorption of fixed overhead across a larger revenue base as occupancy improves.

Going into Q2 2026, the group's outlook is for continued execution of its growth strategy through accelerated commercialisation of its development pipeline with occupancy levels expected to improve further. The Shurugwi off-plan sales launch will be the most concrete test of that outlook in the near term.

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