Business / Companies
ZPI targets 40% income from projects
15 Mar 2013 at 13:04hrs | Views
HARARE - There is now limited scope for rent reviews in the sector and ZPI is focusing on growing the contribution of projects to total income, MD Edson Muvingi told an analysts briefing yesterday.
He noted that the company had no projects income in 2007 but in F12 the contribution was 24%.
"That represents a significant diversification and dilution of rental income contribution. We want projects to contribute up to 40% of our income," he said.
Earlier on Finance and Administration Manager Nyasha Zhou had said their industry is facing numerous problems including rising voids, tenant defaults and rising debtors.
Zhou added that the company has been facing difficulties in securing long-term funding.
He also noted that there has been limited availability of mortgage financing as well as limited upward rent review.
ZPI's revenue increased by 31.5% from $3.9 million recorded in the prior year to $5.1 million for the year ended 31 December 2012.
The expected revenue from the firm's Tynwald high density residential development project is estimated at $3.5 million.
Meanwhile, MD Edson Muvingi said ZPI will start selling the stands today. He added that there are 650 people who are on the waiting list for purchasing the stands against the 288 stands.
As noted by Zhou the short term borrowings decreased by 72.3% at $186 030 and this was a short-term loan borrowed from ZB Bank Limited, "to fund the Tynwald project."
In the period under review ZPI's investment property increased by 12.4%, total assets also went up by 11.6% and land development by 21.5% as mentioned by Muvingi.
Commenting on the elections, Muvingi said; "We believe beyond elections, whoever takes the crown it does not matter; asset prices will rerate in line with the region."
The rent collections improved by 3.3% and there was an increase in average rent per square meter in both retail and office from $12 and $7 each to $15 and $8.50 respectively.
Muvingi also pointed out that the portfolio rent increased by 25.7%. Looking at rent contribution per sector for the company's 2012 financial year, he said office contributed 55% while retail contributed 37%.
However, he mentioned that the firm wants retail income to be more than office income.
"You will see a lot of horizontal graduation on rental income… Over the years we've been saying that we want to move away from dominance of rental income on our income statements and that has been significantly achieved. Now projects income contributed 24% to the total income."
Under rent collection, Muvingi noted that some of the evictions of their tenants from the company's properties are deliberate.
"For us, some tenants are better off out of our portfolio than remaining in. So some of the evictions are deliberate," said Muvingi.
Going forward, Muvingi said projects remain the main focus for the firm. He also noted that the acquisition of strategic land banks is still ongoing.
"Recapitalisation of portfolio properties will continue on a phase kind of development. Another critical issue is the containment of voids and debtors," he said.
He noted that the company had no projects income in 2007 but in F12 the contribution was 24%.
"That represents a significant diversification and dilution of rental income contribution. We want projects to contribute up to 40% of our income," he said.
Earlier on Finance and Administration Manager Nyasha Zhou had said their industry is facing numerous problems including rising voids, tenant defaults and rising debtors.
Zhou added that the company has been facing difficulties in securing long-term funding.
He also noted that there has been limited availability of mortgage financing as well as limited upward rent review.
ZPI's revenue increased by 31.5% from $3.9 million recorded in the prior year to $5.1 million for the year ended 31 December 2012.
The expected revenue from the firm's Tynwald high density residential development project is estimated at $3.5 million.
Meanwhile, MD Edson Muvingi said ZPI will start selling the stands today. He added that there are 650 people who are on the waiting list for purchasing the stands against the 288 stands.
As noted by Zhou the short term borrowings decreased by 72.3% at $186 030 and this was a short-term loan borrowed from ZB Bank Limited, "to fund the Tynwald project."
In the period under review ZPI's investment property increased by 12.4%, total assets also went up by 11.6% and land development by 21.5% as mentioned by Muvingi.
Commenting on the elections, Muvingi said; "We believe beyond elections, whoever takes the crown it does not matter; asset prices will rerate in line with the region."
The rent collections improved by 3.3% and there was an increase in average rent per square meter in both retail and office from $12 and $7 each to $15 and $8.50 respectively.
Muvingi also pointed out that the portfolio rent increased by 25.7%. Looking at rent contribution per sector for the company's 2012 financial year, he said office contributed 55% while retail contributed 37%.
However, he mentioned that the firm wants retail income to be more than office income.
"You will see a lot of horizontal graduation on rental income… Over the years we've been saying that we want to move away from dominance of rental income on our income statements and that has been significantly achieved. Now projects income contributed 24% to the total income."
Under rent collection, Muvingi noted that some of the evictions of their tenants from the company's properties are deliberate.
"For us, some tenants are better off out of our portfolio than remaining in. So some of the evictions are deliberate," said Muvingi.
Going forward, Muvingi said projects remain the main focus for the firm. He also noted that the acquisition of strategic land banks is still ongoing.
"Recapitalisation of portfolio properties will continue on a phase kind of development. Another critical issue is the containment of voids and debtors," he said.
Source - zfn
