Mashonaland Holdings company secretary Batanai Peresuh says reduced capacity utilisation across the economy, the COVID-19 induced lockdown, and a continual decline in purchasing power continue to put pressure on demand for real estate space.
Zimbabwe is currently facing surging inflation amid a COVID-19 induced lockdown closing down businesses.
Peresuh says, “Rent reviews are becoming more difficult as the tenants’ rent paying capacity continues to erode.”
“The national lockdown, whilst necessary, has had an impact on tenants’ beneficial occupation, putting pressure on collection and space absorption.”
On the impact of COVID-19 to Mashonaland Holdings, the secretary says the lockdown, as a result of the virus, prevented over 70% of the Group’s tenants from being physically present in the leased premises, as they are classified non-essential.
“The major impact has been a drop in collections levels for April 2020, which closed at 70% down from the average of 95%, which was testament to the Group’s strong tenant base,” Peresuh says.
“The Group has also engaged all its service providers and reduced levels of service in line with requirements, without compromising quality, to reduce building operating costs during these difficult times.”
“Forecast assessment of solvency for the quarter shows reduced insolvency risk under the Worst-Case Scenario.”
Mashonaland Holdings will put in place measures to enable implementation of some of its construction projects according to the group’s secretary.
“In light of the surging inflation, the Company will continue to explore opportunities to preserve shareholder value primarily through implementation of pre-leased developments and revitalization of existing buildings to ensure future-fit,” Peresuh says.
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