Zimre Property Investments Limited (ZPI) is feeling the pinch of the harsh economic environment, as evidenced by the subdued rental income stemming from increasing voids.
BY FIDELITY MHLANGA
The company’s total revenue for the half year waned by 7% to $2,57 million from $2,76 million achieved during the same period last year.
“Investment property portfolio performance remained subdued. Rental income declined by 14% over the same period last year from $1,64 million to $1,41 million. The average portfolio rental yield remained at 7% while voids went up from 25% to 26% during the reporting period,” ZPI said in a statement accompanying its results.
The company’s profit after tax for the six months ended June 30 marginally increased to $613 526 from $571 907 in the same period last year.
ZPI said the demand for central business district offices and industrial space weakened further.
“The business operating environment continued to deteriorate. This was characterised by cash and foreign currency shortages, declining revenue and emerging inflationary pressures. The property sector was not spared as evidenced by declining rental revenues as well as increasing debtors and voids,” ZPI said.
The firm said there was a decline in rental rates and an increase in voids although retail space remained resilient, compared to other property sectors.
The company added that pressure on rental rates and the increase in voids negatively affected rental performance, resulting in a decline in revenues. Projects income for the period grew by 3% from $1,08 million in the previous year to $1,11 million.
“On the outlook demand for office space is expected to remain subdued. Consequently, rental rates and capital value are likely to underperform. Further diversification of both income and portfolio mix remain strategic,” the company said.