First Mutual Properties releases its 2023 Annual Report

By Published On: June 12th, 2024Categories: Corporate announcement, Earnings


Overview of Operating Environment

The business environment remained uncertain due to global geopolitics, trade tensions and slow economic recovery. Global inflationary and supply chain pressures continued to have a negative knock-on effect on the domestic market. US dollar inflation on the domestic market and currency pressures remained high during the period under review. Average inflation fell to 29.4% in 2023 from 41.9% in the prior year. The local unit depreciated by 89% against the US dollar, while the parallel market premium averaged 40% during the year. Despite these challenges, management continued to adapt its response plans to protect shareholder value. On a positive note, the country registered a good economic growth performance of about 3.5%. Notably, the demand for infrastructure and other supporting assets largely reflects market confidence in the country’s economic prospects. We, therefore, look forward to continued implementation of measures to enhance macroeconomic stability and confidence.

Property Market Overview

The supply of space in the CBD Offices and suburban retail sectors remained high, driven by increased vacations/migration to office parks and suburban office sectors.

Most Tenants shifted to paying rentals in USD currency, however in line with the country’s laws where the multicurrency system subsists, most tenants paid operating costs using local currency especially for utilities which were billed in the ZWL$ currency. Property transactions have also remained low as some economic agents use the property as a hedge against currency volatility.

The market has seen an increase in the development of residential stands, cluster houses and high-rise fats. Further, investors are focusing on owner-occupied office park-style buildings and the conversion of residential properties into offices in the suburbs surrounding the CBD and on major arterial routes. There has been a significant increase in the development of industrial and warehousing properties in the country. There is a need for supporting infrastructure, including water, power and roads to support the densification-oriented type of development.

Business performance overview

The Group’s inflation-adjusted Net Property Income rose by 295% to ZWL 17.714 billion (FY2022: ZWL 4.484 billion) while inflation-adjusted revenue was up 193% to ZWL 40.932 billion (FY2022: ZWL13.952 billion). Rental income remains the main source of revenue. In historical terms, revenue grew by 1,115% from ZWL 2.102 billion in December 2022 to ZWL 25.539 billion mainly due to timeous rental reviews and stable occupancy level that averaged 88.07% for the year under review compared with 85.52% last year.

Management continued to engage the tenants for timeous rental payments. For 2023, the collection rate achieved was 85% (FY 2022: 86%). The Company is committed to providing its tenants with a quality and safe product (property). To this end, ZWL 4.827 billion and ZWL 187.87 million were spent on maintenance and improvements, respectively during the year.

Property valuations

An independent property valuation conducted by Knight Frank Zimbabwe as at 31 December 2023 valued the property portfolio at ZWL 1.067 trillion (FY 2022: ZWL 109.372 billion). The growth in rentals, in line with the inflationary environment, has been responsible for the growth in property values of 876%.


The Group has strategically positioned itself to generate shareholder value by pursuing various projects at varying execution stages.

The Group’s flagship project is the Arundel Office Park extension, whose scope involves building a double-storey office block with a basement, providing a lettable area of 2,616.5 square metres, which is underway. Significant progress has been made on the project and it is nearing completion with glazing, wall and floor tiling, solar installation, lift installation and internal finishes now remaining.

The Group is a co-investor and project manager in constructing a 388-bed student accommodation building near the Chinhoyi University of Technology. The project is progressing relatively well, with completion expected in H1, 2024.

In Zvishavane, the Group is also a co-investor and Project Manager in the development of mixed-use duplex clusters, three to four storey apartments, and student hostels, with the proposed designs having been approved by Zvishavane Town Council.

The project is in three phases. Phase A, comprising 6 duplex fats and 20 blocks of double and triple-storey fats, is already underway and completion is targeted for the 30th of September 2024.


The Group will continue to conduct its operations in a sustainable manner, aligning with the principles of environmental, social, and governance (ESG) requirements. Sustainability principles are embodied in the Group’s strategy wherein “green” operations are a top priority. Therefore, solar power will be prioritised for all new developments and upgrades. The new office block development at Arundel Office Park will incorporate a solar plant so as to reduce carbon footprint of the property portfolio and also provide reliable and affordable green energy to tenants. Further, management is promoting energy efficiency, and implementing waste management initiatives. The Governance structures around ESGs are also being enhanced.


At a meeting held on 23 February 2024, the Board of Directors recommended that no dividend should be paid for the last quarter of the year 2023, and the available cash be channeled towards the expansion programme. This brings the cumulative dividend for the year ended 31 December 2023 to ZWL 395.7 million being 31.9588 ZWL cents per share and USD 142,746 being 0.01153 United States Cents per share.

Business Outlook

The environment remains uncertain due to the potential knock effects of global shocks, likely drought and currency instability. Management remains alive to these exogenous factors and will, therefore, continue to adapt its response plans to enhance shareholder value. The Group will continue to invest in profitable properties to hedge against inflation and exchange rate risks. Further, management will prioritise the maintenance of high occupancy levels by effectively managing client relationships and providing quality and secure products. This will be achieved through ongoing property refurbishment, maintenance, and upgrades.


On behalf of the board, I would like to thank my fellow board members, management and staff for their significant contributions to the Company’s performance under difficult conditions. I thank our key stakeholders, including strategic investment partners, tenants and service providers, for their invaluable support.

Elisha K. Moyo
Chairman of the board
23 February 2024

FMP 2023 Annual Report.pdf

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