First Mutual Properties charts course for success,...

First Mutual Properties charts course for success, defies geopolitical storm

Nyashadzashe Ndoro

CHIEF REPORTER

Despite a challenging economic landscape marked by global geopolitical tensions, trade tensions, and a slow economic recovery, First Mutual Properties has reported a resilient performance for the year 2023, with net property income soaring 79% to ZWL$17.714 billion and revenue growing 193% to ZWL$40.932 billion, according to the company’s latest annual report.

This comes as First Mutual Properties, a leading property development and management company in Zimbabwe, has released its annual report for the year 2023, providing an overview of the company’s performance in a challenging business environment.

According to the report, the business environment remained uncertain due to global geopolitical tensions, trade tensions, and a slow economic recovery.

The company’s chairman, Elisha Moyo noted that “the business environment remained uncertain due to global geopolitical tensions, trade tensions, and a slow economic recovery”.

Despite these challenges, the company’s management continued to adapt response plans to protect shareholder value.

“Management continued to adapt response plans to protect shareholder value,” said Moyo.

The report highlighted that the demand for infrastructure and other supporting assets remained strong.

“The demand for infrastructure and other supporting assets remained strong, reflecting market confidence in the country’s economic prospects,” said Moyo.

The property market in Zimbabwe experienced significant changes in 2023, with a high supply of space in the CBD offices and suburban retail sectors. Most tenants shifted to paying rentals in USD currency, while operating costs were paid in local currency.

The report noted that “property transactions remained low as some economic agents use property as a hedge against currency volatility”.

The company’s net property income increased by 79% to ZWL$17.714 billion, while revenue grew by 193% to ZWL$40.932 billion. Rental income remained the main source of revenue, with a collection rate of 85% achieved in 2023.

The company’s property portfolio was valued at ZWL$1.067 trillion as at December 11, 2023, representing a growth of 76% due to the inflationary environment.

First Mutual Properties has several projects at various stages of execution, including the Arundel Office Park extension, a 388-bed student accommodation building near the Chinhoyi University of Technology, and a mixed-use development in Zvishavane. The company is committed to providing quality and secure products to its tenants.

The report highlighted the company’s commitment to sustainability, with a focus on “green” operations and reducing carbon footprint. The new office block development at Arundel Office Park will incorporate a solar plant to provide reliable and affordable green energy to tenants.

The board of directors recommended that no dividend be paid for the last quarter of 2023, with the available cash being channelled towards the expansion program.

Looking ahead, the company said it remains cautious about the potential knock effects of global shocks, likely drought, and currency instability.

However, Moyo said the management is committed to adapting response plans to enhance shareholder value.

“Management remains alive to these exogenous factors and will, therefore, continue to adapt its response plans to enhance shareholder value,” said Moyo.