ZPI identifies buyers for Zimre Centre and Fidelity Towers
ZIMRE Property Investments (ZPI) says it has identified prospective buyers for three properties it is disposing in Harare and Masvingo.
ZPI is disposing Zimre Centre and Fidelity Life Towers in Harare and the Zimre Centre in Masvingo buildings as it diversity its revenue base, anchoring the business on property development as the traditional revenue base because rental income continues to decline.
Managing director Edon Muvingi said revenue generated from the sale of the three buildings would be channelled toward property development.
“Rental income in the five months to May dropped by nine percent to US$1,4 million from US$1,4 million last year…We want to deploy capital raised towards property development as this will be the key base for the company going forward,” he said at the group’s annual meeting.
Declining occupancy levels, also reported by other market players this year, have been triggered by an exodus of tenants to areas outside the central business district or forcing them to change their business model.
Rental collections for the five months to May 30 were 76 percent down from 90 percent in April as tenants are said to be paying at the end of month compared to the previous periods where payments were made at the beginning of the month, while liquidity challenges had also affected performance.
“At least 13 percent of the outstanding rentals is being collected through various channels which include courts challenges. Average void rate is at 24 percent increasing from 22 percent in 2015,” said Muvingi.
Projects income continue to anchor group revenue with stand sales increasing 58 percent at US$828 000 from US$526 000 last year, but the sales are 37 percent below budget of US$1,32 million. Total income for the period was up 15 percent to US$2,4 million compared to US$2,1 million last year.
Property developments that ZPI is currently undertaking include Zimre Park Extension in Ruwa, which is he said was due to be completed this month.
The project is on 60 hectares of land and is being developed into 236 commercial, residential, institutional and industrial stands.
“This project is approximately 80 percent complete. This project started selling in December last year at average US$28 per square metre and sales achieved to date are around US$800 000,”Muvingi said.
The anticipated cost of this project is US$4,1 million and expected revenue is US$6,3 million, with a projected return of 48 percent.
Muvingi said the group will also embark on a new project the Merwede (Snake Park) Harare, which will commence in November 2016 at a cost of US$1,2 million.
“Expected value is at US$1,7 million with a return of approximately 36 percent. The project involves development of 128 high density residential stands on 3,6 hectares. The project is now awaiting permit and other approvals,” he said.
Other projects ZPI is working on are the development of shopping centres in Kuwadzana and in Chinhoyi Street in central Harare.
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