The environment was characterised by low economic activity, inflationary pressures, power challenges and foreign currency constraints that had a huge bearing on business. The Government adopted major policy reforms including the adoption of the mono currency regime. Fiscal and monetary policy reforms were intended to stimulate economic activity.

Exogenous factors particularly the climate change – drought and Cyclone Idai have had negative effects on the economy. Management continued to adapt its strategies in order to minimise the potential adverse effects of the external conditions on business sustainability.


In 2019, the Zimbabwean property market remained subdued, characterised by high levels of voids. The Central Business District was less affected by power outages. Growth in the SME activities also stimulated the demand for working space. The Retail and office park sectors remained relatively stable during the year due to limited availability of quality space.

Rentals improved during the year as landlords frequently repriced space in line with currency changes and inflationary trends. The range of increases was influenced by the size, quality and location of the properties. The introduction of Statutory Instrument 133 of 2019 resulted in ZWL rental charges.

Development activity remains dominant in the residential and industrial sectors, with the latter focusing on warehousing and light industrial structures. The majority of industrial units are however earmarked for owner occupation. Office space development is also relatively active and mostly earmarked for owner occupation, with limited speculative activity.

Development risk remains high due to inflationary pressures affecting development costs.

However in order to protect the value, property investors are entering into new developments taking a long term view, assuming the development risks and utilising available excess liquidity to hedge value and inflation risk in real assets.


The Group had a positive performance for the year in spite of the tough operating environment. An increase in operating profit of 88% was realised on the back of improved occupancy levels and turnover rentals. The value of the investment property portfolio grew by 53% driven by fair value gains.

Rental income decreased by 12% to ZWL 58.10 million (FY2018: ZWL 65.76 million) underpinned by foreign currency translations effect. In the period there were new lettings which improved occupancy levels to 85.70% (FY2018: 76.10%). Property expenses, at ZWL 14.04 million, were down by 11% in line with drop in revenue. However, the business maintained its strategic focus of investing in maintenance programmes to improve the quality of space aimed at attracting new tenants and retaining existing ones. Net property income marginally decreased by 13% to ZWL 43.31 million (FY 2018: ZWL 49.65 million) due to decrease in rentals. Administration expenses declined by 29% to ZWL 20.72 million in 2019 from ZWL 29.40 million in prior year largely due to cost containment measures implemented by the business.

An independent property valuation conducted by Knight Frank Zimbabwe as at 31 December 2019 valued the property portfolio at ZWL 1,392.13 million, being an 53% gain on the prior year, on a market value basis. The gain was driven by fair value gains of ZWL 485 million which were realised across the sectors. The Group’s strategic land bank contributed significantly to the appreciation in value of property portfolio.

The company is at pre – construction stage of the Arundel Office Park extension with formal appointments of the design team having been concluded. In preparation of the project, some pre purchases of bulk materials have commenced. The construction work is set to commence in H2, 2020.


At a meeting held on 27 February 2020, your Board resolved that a final dividend of ZWL 4.2 million being ZWL 0.34 cents per share be declared from the profits for the year ended 31 December 2019. The dividend will be payable on or about 3 July 2020 to all shareholders of the Group registered at close of business on 3 June 2020. The shares of the Group will be traded cum-dividend on the Zimbabwe Stock Exchange up to 29 May 2020 and ex-dividend as from 1 June 2020.


The Group embarked on a tax restructuring exercise to consolidate the property holdings to create operational efficiencies. The restructuring exercise was completed in the period under review.


The economic outlook remains uncertain due to climate change, power supply, foreign currency challenges, low productive sector capacity utilisation and the further potential adverse effects of COVID-19. These factors have ramifications for the country’s recovery prospects and will affect demand for various real estate products. The Group will however continue to pursue and implement various strategies to preserve shareholder value and position the Group for growth.

In the short term the focus is on driving rental growth, managing operating and maintenance costs, all to ensure the going concern and sustainability of the property portfolio. With changing local and global and real estate trends, the Group will target investment opportunities in nontraditional real estate asset classes and provide property services to third parties to further diversify income streams. In addition, in light of the changing socio-economic environment, the Group will also focus on developing new products and tailoring existing stock to the changing requirements.

The depth and breadth of the economic impact of COVID-19 on the real estate sector remains uncertain. Long term behavioural changes will define market direction, as immediate reactions and changes may not be long term. The ability to ensure real estate products are agile and adaptable is critical. The focus for property investors will be on determining the right balance between capital preservation and further strengthening the competitive differentiation of existing products. COVID-19 has accelerated the need to diversify revenue streams, pursuing digital strategies, and focusing on enhancing tenant experience with owners and operators collaborating to protect their ecosystem to remain a going concern.


On behalf of the Board, I wish to thank all our stakeholders for their continued invaluable support.

E. K. Moyo

Related download
FMP | FY2019 financial results