daniel chigunwe
Michael Tome
ZIMRE Holdings Limited (ZHL) says it registered an 86 percent increase in occupancy levels despite the subdued demand for office space in the Central Business District.
The growth in occupancy is significant considering the current challenges facing the commercial real estate sector.
In addition to the rise in occupancy, ZHL maintained a strong collection rate of 94 percent, demonstrating the company’s efficiency in managing its rental income amidst economic headwinds.
The resilience of the group is further highlighted by its property cluster, which generated a total income of US$1, 9 million.
This marks a 16 percent increase from the US$1, 6 million reported in the corresponding period of the previous year, emphasising the cluster’s continued appeal as a reliable and value-preserving asset class. This comes as the sector is recording growth in voids, particularly in the Harare Central Business District (CBD) office segment which has been significantly affected by growing tenant preference for out-of-CBD space.
CBD is grappling with high void rates and declining demand as major corporations are now relocating to suburban areas, leading to increased vacancy rates and subdued activity in central business districts.
This trend has largely been driven by challenges that include traffic congestion, poor infrastructure, inadequate parking, high operational costs and noise pollution which now characterise the CBD.
While the office segment is facing difficulties, the retail segment remains buoyant, showing signs of growth with an increasing number of tenants seeking space in strategic locations that offer visibility and access to ready markets.
Despite the increasing cost of production, the residential segment continues on a growth path, providing better investment opportunities for developers.
In its third-quarter trading update for the period ending September 30, 2024, ZHL showcased a robust financial performance, navigating the complexities of a challenging economic environment with agility and foresight.
The data reflects not only the enduring strength of ZHL’s real estate portfolio but also the company’s strategic approach to maintaining growth in a competitive market.“The property cluster generated total income of US$1, 9 million, a 16 percent growth from US$1, 6 million in prior period. This robust growth underscores the cluster’s resilience and appeal as a value preserving asset class.
“During the period, the portfolio registered a collection rate of 94 percent, while occupancy levels averaged 86 percent despite the subdued demand for CBD office space,” said Ruvimbo Chidora company secretary in the third quarter trading update to 30 September 2024.
The company’s commitment to infrastructure development is demonstrated through its Eagle REIT, which has shown remarkable advancements on its flagship projects.
One of the standout initiatives, the Mazowe Walk project, has made significant strides and is currently at 51 percent complete. This development promises to be a cornerstone of commercial activity in the area upon its completion.
Furthermore, the highly anticipated Victoria Falls mixed-use development which is poised to be launched soon, aims to create a vibrant environment that blends innovative commercial spaces with contemporary residential options.
This project is expected to attract both residents and tourists, enhancing the cultural and economic landscape of the Victoria Falls area.
Additionally, the Selbourne Park residential development in Bulawayo officially commenced construction during the third quarter of this year. This initiative is in direct response to the increasing demand for quality housing in the region, as it seeks to improve living standards and provide modern amenities for its residents.
Overall, the unaudited figures released by ZHL reflect an upward trend across various business segments, underscoring the effectiveness of the company’s strategic initiatives and their positive impact on growth and development.
Bongani Ndlovu