Property development company, Pearl Properties, recorded a rental income of $3,88 million for the six months ended June 30 2011 due to favourable rental negotiations in the period under review.
Income for the same period last year stood at $3, 33 million.
Speaking at an analysts briefing, Pearl Properties general manager Peddy Chigunduru said the company reviews its rents twice a year after every six months and the stable environment had resulted in the company performing better than last year same period.
He said the average rental per square metre for the period went up by 33, 97% to $6,31 from $4,71 last year translating to a decline in rental yield in the period under review to 9,10% from 9,22% from the same period last year.
“The decline in rental yield partly reflected the impact of additional vacant space as rising from the continuing property refurbishment activities and legal evictions of defaulting tenants,” “said Chigunduru.
He, however, said the company would be able to meet its year-end rental yield target of 10% this year.
During the six months under review demand for central business district retail space was strong compared to the demand of central business district office space and suburban retail space that remained subdued.
“The ongoing property refurbishment of properties in the portfolio and the prevalence of low quality tenants resulted in the vacant space increasing to 17,22% of the total lettable area as at June 2011 from 12,62%,” he said.
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Operating profit for the group increased by 5,40% to $2,87 million compared to $2,72 million last year. The improved operating profitability was underpinned by relatively good rentals and investment income realised from the disposal of equities.
Chigunduru said the construction of housing units at the Kamfinsa Cluster Housing projects will begin in September and should be completed after nine months, at a cost of $2,7 million.
He said civil works at the cluster project started in April this year together with refurbishments of the George Square shopping centre in Kamfinsa at a total cost of $1,2 million.
The company acquired 53,375 square metres of land in Borrowdale Suburb at a cost of $0,63 million.
Total shareholder’s equity rose by 1,64% to $90,41 million from $88,95 million.