Mash Holdings to sink $19m in property development

Livingstone Marufu
LISTED property concern Mashonaland Holdings will invest more than $19 million to build 120 houses in Harare’s upmarket suburbs.
The projects, which will be developed on the business’s 100-hectare land bank, are forecasted to positively impact on the group’s topline.

Last week, Mashonaland Holdings chief property manager, Mr David Mutemachani told The Sunday Mail Business that the group’s commitment towards the new housing projects is driven by the recent success of the $4,8 million Belgravia office park.
Currently, the property firm’s land bank is being expanded through strategic partnerships and open market acquisitions.
Much of the expansion is being funded through a percentage of net earnings that are retained in order to be reinvested into the company’s core business or to pay debt.
“Following the success story on US$5million Belgravia office park project, the company has embarked on a more ambitious exercise of constructing 120 (three-bed) housing units in the eastern, western and northern suburbs of Harare using retained earnings. . .
“In Mabelreign we are going to construct a total of 35 housing units at a cost of US$3million, in Greendale nine units for US$1 million and in Westgate 25 units at a cost of US$2,2 million.
“Construction in Mabelreign is expected to commence during the first half of the calendar year and the other projects will be commenced sequentially after completion of Mabelreign.
“For these developments, various funding options are being pursued,” said Mr Mutemachani.
He said the company’s main development is the $13 million Hazeldean project in Borrowdale where 51 three-to four-bedroomed housing units, each sitting on 2000 square metres, will be constructed.
Mashonaland Holdings has a rich portfolio of properties that include ZB Life Towers in Harare, where its headquarters are also located, all ZB centres across the country, West End Clinic, Express Stores in the capital, Charter House, Bluffhill Industrial Park, Rhodesville Supermarket, Simon Mazorodze Industrial Property, Houghton Park Shopping Centre, Ryelands Properties in Sam Levy and Ronica Mews.
“In terms of uptake for our projects, we always embark on a project after thorough research and certain demand. In the case of office premises, we want to have a tenant lined up and lease signed before commencement.
“We will not develop offices speculatively until the market is on a certain upswing.
“We have since commenced on projects to unlock value on existing land banks and trading of development stock from these projects will improve revenue streams.
“We have over the years acquired a diverse land bank at various stages of the development life cycle for the different projects and we have a land bank of 100ha of prime land,” he said.
According to Mr Mutemachani, targeted annual revenues of $400 000 from Belgravia office rentals will help develop the other projects.
“The rental market has stagnated and is likely to remain subdued for the rest of the year across all sectors characterised by downward rental reviews as weakening aggregate demand continues to take its charge on the economy.
“For the better part of the year, tenants have been defaulting at alarming levels sitting at around 80 percent,” explained Mr Mutemachani. Most of the company’s development permits have since been issued. The company recently bought 42,1 hectares of land in Ruwa which is earmarked for mixed-use development.