daniel chigunweFrancis Gakanje
Revitus Real Estate Investment Trust (REIT) has defied economic headwinds to deliver a strong financial performance for the first half of 2024, showcasing its resilience and commitment to value creation.
Despite the impact of tenant evictions and lease terminations on occupancy and yield ratios, the REIT’s overall financial performance remained strong and was able to declare a dividend.
Revitus REIT asset manager, Tendai Muzadzi in a statement accompanying the results said the Revitus REIT exceeded its half-year profit target by 36 percent, based on its current portfolio of buildings awaiting revitalisation as it aims for greater returns.
The gross rental income for the period under review was US$432 124, while the profit for the period was US$184 619.
Additionally, the net asset value reached US$21 064 047 from US$20,924,639 prior year comparative.
In accordance with its commitment to provide quarterly distributions, the REIT announced a dividend of US$48 134 (being 0,0131 United States cents per unit).
Muzadzi emphasised that the property market is still growing and demand for different properties is high.
Muzadzi said, “Positive growth in the property market is anticipated from heightened demand for residential and commercial real estate, supported by increased interests from international investors, expansion of the tourism sector, and Government’s initiatives aimed at provision of affordable housing.”
Muzadzi said the REIT is committed to its vision of rejuvenating CBD properties while delivering enhanced sustainable returns to its investors.
“The pilot project for refurbishment of Chester House (Harare) is at an advanced stage with final technical approvals for conversion from office use to licensed residential accommodation scheduled to be secured in the third quarter of 2024,” added Muzadzi.
He said the selection of a reputable operator for Chester House is expected to be finalised in the second half of 2024, as preparations for renovation efforts are also nearing completion.
In the period under review, the properties experienced a downturn in overall occupancy and yield ratios.
The occupancy ratio stood at 39 percent reflecting tenant evictions and lease terminations in preparation for commencement of renovation works, and the cancellation of non-performing leases.
As a result, these actions had a significant impact on the financial performances of the properties.
“Performance metrics are expected to improve after renovations as reputable tenants will be on-boarded in the short to medium term,” according to Muzadzi.
Meanwhile. in the second quarter for 2024, the Trust’s average collection ratios rose to 79 percent, an increase from 69 percent recorded in the first quarter.
This improvement is attributed to on-going reviews of credit control measures aimed at enhancing performance, despite the liquidity challenges faced in the country.
Bongani Ndlovu