HomeNews$700k for Pearl House renovations

$700k for Pearl House renovations

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PEARL Properties said it has set aside $700 000 for refurbishment of its Pearl House building in Harare to accommodate small businesses that were being pushed out of business by high rental charges.

By Victoria Mtomba
Business Reporter

The company’s managing director Francis Nyambiri said they were currently refurbishing the air conditioning system, adding that the building would be ready for occupation in the first quarter of this year.

“We used to have one tenant per floor, but through the refurbishment we will have two tenants per floor that will take between 150-200 square metres. Before, one tenant would take 300 square metres, but small businesses do not need some of the space,” he said.

The group said the economic decline characterised by liquidity challenges, limited mortgage finance and high unemployment would curtail any meaningful activity in the real estate sector.

“The property market continues to face challenges with nominal property transactions being recorded especially in the lower end of the market. Some limited property developments were undertaken during the year, especially in low income residential housing developments schemes and other self-financing, co-operative type residential developments.”

The company said the number of defaulting tenants was increasing.

The group said in 2013 the average occupancy levels were between 70% to 80% and vacancies increased by 10% in the last six months.

The company’s profit after-tax was up 8,8% to $9,8 million from $9 million in 2012. Net property income was up 1,91% to $7,3 million due to rent reviews and new lettings.

During the period under review voids and void-related costs increased due to evictions and company closures.

Increasing arrears resulted in increased provision of credit losses and specific write-offs.

The company has acquired 24 0664 hectares of land in Mt Pleasant at a total cost of $9,6 million.

Pearl will spend $60 million in the first phase of construction at the site.

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