Property group Mashonaland Holdings Limited’s earnings per share for the six months ended March 31, rose to 0,12 from 0,08 achieved during the same period last year, driven by growth in net property income.
No dividend was declared during the period under review. The group’s profit for the period climbed to $1,9 million from $1,4 million.
Net property income rose to $3,2 million from $2,3 million recorded during the same period last year despite liquidity constraints on the domestic market.
The group’s revenue grew 35% from the corresponding period last year due to rentals that were renegotiated to match market levels.
“The rental growth was driven by positive lease negotiations,” said company chairman Elisha Mushayakarara in a statement accompanying the financial results
“Management is aware of the uncertainties in the macroeconomic environment and expects the future rent negotiations to be largely reflective of these circumstances.
“The inconsistencies in the operating environment raised the country’s perceived risk and negatively impacted the general business confidence.
“The continued absence of appropriate real estate financing instruments curtailed activity in the real estate sector.
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“The liquidity constraints resulted in some tenants facing challenges in discharging their lease obligations,” he added.
The group’s average portfolio yield remained flat at 9% although industrial sector achieved a yield of 11% during the period under review.
Experts contend rentals for commercial properties are also likely to retreat as most manufacturing companies, currently struggling to operate at optimal levels, have started leasing out warehouses to widen their revenue streams.
With a limited number of financial institutions offering mortgage finance, other players, however, argue that a 10-year mortgage at an average interest rate of 15% per annum could result in a high default rate.
Currently, mortgage financiers, Central African Building Society, FBC Building Society and CBZ Building Society, are active on the market offering mortgage financing for low-cost houses.
