Revitus suffers low rental collection for Q1 due t...

Revitus suffers low rental collection for Q1 due to inflationary pressures

Audrey Galawu

Real Estate company, Revitus' average occupancy and yield ratios were weakened by evictions of tenants in preparation for renovations and termination of non-performing leases for Q1 2024.

Economic challenges induced by inflationary pressures and exchange rate volatility added pressures on tenants’ ability to meet their obligations, resulting in low collection rates for the period under review.

The company, however, expects improvement as the buildings are revitalised and quality tenants are on-boarded in the short-to-medium term.

In its trading update, Revitus said anticipated economic stability driven by a more stable structured currency is expected to enhance business performance for occupants and uplift collection rates.

“The first quarter witnessed a rapid depreciation of the local currency, high inflationary pressures and liquidity challenges in the economy.

"This culminated in government intervening through the introduction of a new structured currency in early April 2024, the Zimbabwe Gold which is expected to foster macroeconomic stability and predictability in the exchange rate going forward.”

Despite the economic challenges, the achieved profit for Q1 was 81% above budget and the growth trend is expected for the rest of the year.

The company’s property fund remains focused on the vision to revitalise CBD properties and improve the occupancy ratios, rental yields and market values. The pilot project for refurbishment of Chester House (Harare) is at an advanced stage with the conversion from office use to licensed residential accommodation scheduled to commence in Q3 2024.

Preliminary scoping of Pioneer House (Bulawayo) renovations is underway, with commencement of the project expected to result in a temporary revenue shrinkage after tenant evacuations.