First Mutual Properties releases its 2022 Annual Report

By Published On: June 6th, 2023Categories: Corporate announcement, Earnings

Chairman’s Statement

Overview of Operating Environment

The global macroeconomic conditions remained largely uncertain due to multiple shocks. Inflationary pressures and supply chain disruptions had a spill-over effect on the local economy. As a result, the local US dollar inflation increased. Despite the forgoing, Zimbabwe’s economic situation was relatively stable on the back of tight monetary measures adopted by the authorities. Sustaining macroeconomic stability will go a long way in stimulating the demand for supporting infrastructure including properties among others.

The Zimbabwe dollar depreciated by 516% against the US dollar to ZWL671 in December 2022 from ZWL109 last year. Annual inflation rose to 244% at year-end from 61% in December 2021. However, inflationary pressures started to recede during the last quarter of the year due to monetary policy interventions by the authorities to limit money supply growth and “speculative” foreign currency activities.

Management continued to closely monitor the business environment and adapted its strategies to protect the business from the exogenous shocks as demonstrated by the performance achieved during the year.

Property Market long-term impacts

The property market fundamentals were mixed during the year. The leasing market for commercial space was the most active segment, with buoyant activity in the retail and industrial sectors. However, the office segment was subdued because of the need by people to re-adjust their newly-formed working habits of “working from home” to “back to the office”. The CBD office experienced the highest vacancy rates forcing most owners to re-model their properties to cater for the Small and Medium Enterprises (SMEs) sector. Further, the retail, industrial and residential sectors enjoyed relatively huge activity during the year. In contrast, commercial property transactions were low due to huge investment requirements. Limited commercial property developments seen during the period under review have largely been self-funded, and are being used as a hedge against currency and inflation risks as well as possible future rental increases.

The industry grappled with “twin evils” of rising defaults on lease obligations and construction cost inflation. Management continues to closely manage these risks given their potentially huge impact on the company’s strategy.

Business performance overview

The Group’s inflation adjusted Net Property Income after administration expenses was ZWL140.5 million (FY 2021: ZWL589.4 million) despite a 42% growth in inflation adjusted revenue to ZWL2.9 billion (FY 2021: ZWL2.0 billion). In historical terms, revenue grew by 342% from ZWL475.4 million in December 2021 to ZWL2.1 billion largely due to the repricing of rentals and relatively good occupancy that stood at 85.5%. Foreign and local currency rental mix was 70% to 30% at the end of the year. This has enabled the Company to preserve value from foreign currency and inflation risks while creating capacity to finance its on-going capital and growth expenditure programs from internal resources.

Collections decreased to 72% from 82% in the prior year particularly on the back of the country’s contractionary policies.

The business strives to maintain buildings in lettable and safe conditions. Against this strategic imperative, a total of ZWL528 million was deployed towards maintenance of buildings. The Company will continue to commit resources towards enhancing the quality of its product offering.

Property valuations

An independent property valuation conducted by Knight Frank Zimbabwe as at 31 December 2022 valued the property portfolio at ZWL 109.3 billion (FY 2021: ZWL 22 billion), representing a growth of 397%.


The Group is at early construction stages of a new office block in Arundel Office Park. The contractor is already on site, and was working on pile foundations in the basement at the end of the year. The project is expected to be completed by December 2023.

Following the successful completion of the construction of Mbare retail warehouse, the premises were handed over to the tenant (Gain Cash and Carry) during the year. The tenant started operations in July 2022.

Various projects to provide university students accommodation are being pursued. At this stage, the most advanced one involves constructing a 430-bed facility in Chinhoyi, which started in October 2022. First Mutual Properties is a co-investor and project manager in the project with other pension funds. The project is expected to be completed in November 2023.


The year 2022 saw First Mutual Properties making significant progress on the sustainability journey through harnessing renewable energy and improving energy efficiency of its properties. Some of the notable green projects implemented during the year include the solar system installation at the head office, replacement of all traditional light bulbs with low energy consumption LED lights and erection of waste management centres. FMP will pursue more of such initiatives going forward as we strive to manage our business sustainably.

FMP was conferred the prestigious Overall Best Corporate Governance award at the Chartered Governance and Accountancy Institute in Zimbabwe Awards 2022. The Company also received the third overall prize on Best Board Practices and Best Shareholder Treatment. These accolades reaffirm the Company’s efforts to improve corporate governance and sustainability practices.


At a meeting held on 24 February 2023, your Board resolved that a final dividend of ZWL 175.4 million being 14.1821 ZWL cents per share and an additional USD150,000 (being 0.011818 United States cents per share) be declared from the profits of the Company for the fourth quarter ended 31 December 2022. This brings the cumulative dividend for the year ended 31 December 2022 to ZWL 477.8 million being 38.5786 ZWL cents per share and USD 400,000 being 0.03229 United States Cents per share.

The dividend will be payable on or about 26 April 2023 to all shareholders of the Company registered at close of business on 14 April 2023. The shares of the Company will be traded cum-dividend on the Zimbabwe Stock Exchange up to 11 April 2023 and ex-dividend as from 12 April 2023.

Business Outlook

The Company remains focused on delivering on its strategy despite the environmental uncertainty caused by the global geopolitical tensions as well as a volatile and complex economic environment. This involves developing a sustainable and well-diversified business portfolio, delivering on new projects within budget, schedule and acceptable quality as well as creating value for all our stakeholders.


The FMP management and staff have continued to deliver favourable results in the face of a challenging business environment. I would like to thank them all for their invaluable commitment. On behalf of the board, I would also want to thank our key stakeholders and my fellow board members for their immense contribution.

Elisha K. Moyo
Chairman of the board
24 February 2023

FMP – 2022 Annual Report.pdf


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