Rental income dominates First Mutual Properties revenue

First Mutual Properties (FMP) says rental income remains its primary source of revenue, with the property investment firm intensifying efforts to diversify both its tenant base and portfolio to strengthen future earnings.

In the group's financial results for the year ended December 31, 2024, FMP chairman Mr Elisha Moyo reported a 62% increase in net property income, which rose to US$4.842 million from US$2.984 million in 2023. Total revenue climbed 31% to US$9.027 million, compared to US$6.896 million the previous year.

"Revenue growth was driven by property services income, especially project management fees, a rise in pure US dollar rentals, and timely rental reviews," said Mr Moyo in a statement accompanying the results.

Despite the overall growth, the rental collection rate declined to 75% in 2024 from 85% in 2023 due to financial difficulties faced by tenants.

"Management is working closely with tenants to resolve the arrears, and there has been an elevated focus on tenant and portfolio diversification," Moyo added.

To maintain high standards across its properties, the group invested US$945,231 in infrastructure upgrades and maintenance during the year.

An independent valuation by Knight Frank Zimbabwe pegged the value of FMP's property portfolio at US$132.948 million at year-end, down from US$179.772 million. The decline was attributed to the shift to the US dollar as the functional currency, with prior valuations converted from local currency using the interbank rate of ZWL5,935.4572 per US dollar.

FMP is also pursuing strategic property development projects aimed at enhancing long-term shareholder value. One of the group's flagship developments, the Arundel Office Park extension, features a double-storey office block with a basement, offering 2,616.5 square metres of lettable space. The project is now complete and valued at US$5.1 million.

In Zvishavane, the company is co-investing and managing a large-scale development that includes duplex cluster houses, three- and four-storey apartments, and student accommodation. The first phase, which includes six duplex flats nearing 90% completion and 20 blocks of apartments ready for commissioning, is well underway. Construction of student accommodation is also progressing steadily.

Looking ahead, Mr Moyo said the company will remain agile in its operations and continue adapting to evolving market conditions.

"Prudent capital management, stakeholder engagement, and effective utilisation of lettable space will be at the core of our operations as we work to protect shareholder value," he said.