Online Reporter
Tapiwanashe Mangwiro
Listed firm, Mashonaland Holdings unveiled a five-year model portfolio plan aimed at reshaping the firm’s sectoral balance and insulating it from market volatility.
“We have got a five-year model portfolio plan that we are pursuing,” chief finance officer Taurai Chigidi stated at the company’s latest annual general meeting.
The roadmap, initiated in earnest in 2020–2021, tackled an over-concentration in Harare’s Central Business District.
“When we started, we had CBD concentration of about 70 percent in our portfolio,” he added.
The goal, he explained, is to reduce exposure to office space risk by both divesting under-performing assets and acquiring properties in non-CBD sectors.
“Our plan is to reduce this concentration gradually,” he added.
To that end, the portfolio’s CBD office allocation has been trimmed from 54 percent to 48 percent, with a target of 29 percent by plan completion.
Metrics that the company said will create a more balanced, resilient portfolio capable of weathering economic shocks.
This strategic pivot is already bearing financial fruit. A trading update through April showed a 20 percent uplift in revenue, rising from US$1,9 million in the same period last year to US$2,3 million.
Operating profit has mirrored this positive trend.
With occupancy at 88 percent and a strong leasing pipeline, especially at Pomona Commercial Centre, Mash Holdings forecasts continued improvement throughout the remainder of the year.
Leading economist Tinevimbo Shava observed that recent macroeconomic reforms and confidence gains are feeding into the broader real estate landscape.
The fourth quarter 2024 Zimstat Business Tendency Survey revealed that 52 percent of firms plan expansion, and 43 percent expect better general conditions, marking a resilient business climate.
Mr Shava noted that the multi-currency framework, especially sustained demand in US dollars, has underpinned investment in commercial assets.
“The dominance of US dollar transactions has attracted substantial investment, mitigating some of the economic volatility,” Mr Shava noted.
He views Mash Holdings’ de-risking from CBD exposure as astute and timely. “Shifting towards a balanced mix of sectors will help them ride out fluctuations tied to urban office demand, especially if smaller businesses continue migrating to suburban and mixed-use developments.”
Portfolio analyst Misheck Mhiripiri offered a nuanced take.
Citing benchmark studies by Property.co.zw and industry analysts, he highlighted that office demand has shifted to suburbs, yielding better occupancy and lower vacancy gaps.
He acknowledged the sharp decline in CBD demand, which matches Mash’s strategic pivot.
At the same time, Mr Mhiripiri cautions that non-CBD returns remain modest.
According to Property.co.zw, local typical yields hover at 5–7 percent, trailing regional SADC peers at 9–12 percent.
Suburban commercial and retail assets are gaining demand, but cap rates are still under pressure from economic instability.
“Even as suburban offices and mixed-use centres draw tenants, financing challenges and erratic growth mean yields may underperform expectations,” he warned.
With high interest rates and cautious banks, growth in the suburbs could be gradual.
Mr Shava lauded the proactive risk-management strategy, “By lowering CBD weight to around 29 percent, while building income across retail, industrial and mixed-use nodes, they are aligning with harder-won macroeconomic stability and evolving tenant preferences.”
Mr Mhiripiri concurred from a strategic standpoint, “Reducing CBD risk is prudent, but deliverable returns in new segments must exceed the thresholds needed to justify the shift.”
He emphasised that sourcing US dollar funding and maintaining tenant quality will be vital.
