Online ReporterRuvarashe Gwasira
Zimbabwe Stock Exchange (ZSE) listed property development and management firm, Mashonaland Holdings, says it navigated a tough trading period marked by significant economic challenges to deliver a 12 percent revenue growth in the year to December 31, 2024.
Mashonaland Holdings chairman Ms Grace Bemha said in a statement of the group’s financial results for the review period that the growth was underpinned by a proactive focus on sustainable property management services and strategic reinvestment to introduce new products to the market.
The property group said the 2024 financial period unfolded against considerable economic headwinds, as Zimbabwe grappled with the effects of the El Nino-induced drought, which severely impacted agricultural output and power generation in the country and the rest of the region.
Simultaneously, the mining sector faced pressure from declining international commodity prices. However, the real estate and financial services sectors emerged as pockets of resilience, buoying overall economic activity.
The Government’s response to inflationary pressures and exchange rate volatility in the first half of 2024 included the introduction of a new currency and the implementation of a stringent monetary policy framework.
While the measures fostered improved stability in exchange rates and prices, they also resulted in a noticeable tightening of liquidity within the formal sectors of the economy.
Despite this challenging macroeconomic environment, Mashonaland Holdings achieved notable success across various fronts.
The revenue growth, which climbed from US$6,2 million to US$7 million, was directly attributed to the group’s strategic emphasis on sustainable property management.
This included effective void management, proactive rent reviews and timely investments in property upgrades and renovations.
Rental income, a significant contributor, increased from US$4,9 million in 2023 to US$5,6 million last year, driven by a strategic rebalancing and optimisation of the property portfolio.
Mashonaland Holdings added the Milton Park Day Hospital to its portfolio in a demonstration of its commitment to socially responsible investing.
This modern 2 134sqm facility, developed under a development and lease arrangement with a leading medical insurance and hospital brand, has been handed over to the tenant, who is making significant strides towards its operational launch.
This development is poised to make a meaningful contribution to the country’s healthcare infrastructure.
Further bolstering its asset base, the group successfully integrated the expansive Pomona Commercial Centre into its portfolio.
This flagship property, representing a US$14,6 million investment, increased the total assets under management to US$94,9 million.
The strategically located commercial centre, offering 14 000sqm of prime wholesaling and flexible warehousing space, was completed in an environmentally conscious manner and achieved an impressive 82 percent pre-opening occupancy.
The Zimbabwean property market in 2024 showcased its resilience in the face of economic uncertainty and limited long-term financing options.
Investment continued to flow into the residential and retail property segments, which are perceived as offering lower market risk due to consistent occupier demand.
While the group recorded fair value gains on investment properties of US$742,907, down from US$1 871,811 in 2023 due to lower volatility in the USD property market, this contributed to a 9 percent decrease in profit after tax, which closed the period at US$3,7 million compared to US$4,1 million in the previous year.
However, the underlying strength of the business was evident in the improved quality of earnings.
Sustainable profits, excluding fair value and non-recurring gains, saw a healthy 10 percent increase, rising from US$2 453,725 in 2023 to US$2 696,146 in 2024.
The group’s investment property portfolio experienced growth, valued at US$91,6 million as at December 31, 2024, compared to US$80,7 million in December 2023.
This increase was driven by property capital gains of US$742 907 and strategic investments of US$10,1 million in key property development projects.
A significant trend observed was the growing influence of the informal sector, which is driving demand for smaller retail spaces in both central business districts and suburban areas.
Property owners are responding to this shift by strategically transforming existing buildings into smaller, more adaptable units to cater to the needs of burgeoning Small and Medium-sized Enterprises (SMEs).
Concurrently, the demand for high-quality living spaces continues to rise, fuelled by the country’s expanding urban population.
Emerging trends also indicate a growing interest among property investors for hospitality real estate in Zimbabwe’s attractive tourism destinations.
With the country’s hospitality sector presenting opportunities for modernisation and expansion, significant investments are anticipated in the short to medium term.
Looking ahead, Mashonaland Holdings said the outlook appeared positive in light of Zimbabwe’s projected 6 percent economic growth in 2025, a significant improvement from the estimated 2 percent growth in 2024.
The agricultural, mining, and services sectors are anticipated to be the primary drivers of this economic recovery. This outlook forecast is expected to provide a supportive environment for Mashonaland Holdings to pursue its portfolio diversification and performance optimisation strategies.
