Demand for warehousing space boasts TSL performance

Diversified agriculture firm, TSL Limited’s property segment’s half year performance for the financial year 2023 recorded significant improvements as voids were narrowed on the back of firm demand for warehousing space.

This comes as the country is also witnessing an improvement in agriculture performance and output, creating the need for more warehousing space.

According to the group, voids improved to 12 percent during the half year period from 37 percent on firm demand for warehousing space to accommodate the increased agriculture output.

Experts in the real estate sector say supply for warehousing space has remained limited resulting in a spike in demand.

Apart from demand from the agriculture sector, industrial activity has been on the increase following relaxation of Covid-19 restrictions while mining has also helped push demand for space.

Market watchers also opine that while demand remains strong, it is largely unfulfilled due to limited supply. There have been no significant warehouse completions recently and most new developments are owner-occupied.

Additionally, the positivity in the sector is to an extent continuing to be tempered by power outages, low capitalisation, poor water supply and deteriorating infrastructure.

As for TSL, the listed firm has indicated completion of a 9 000 square meter Mvurwi warehouse, which was completed in time for tobacco marketing season.

Demolition of outdated warehouse in a prime location in Harare completed.

The group also indicated construction of new world class 15 000 square meter warehouse was scheduled to commence during the second half of the financial year.

Overall, the group recorded a solid performance during the half year period with strong volumes growth across all businesses.

According to the group, the tobacco-related businesses performed particularly well and the group is looking at investments into expanding capacity.

Despite a solid performance, the group was not immune to the obtaining economic challenges, as numerous exchange rates were prevalent in the marketplace – inflating cost structure in local currency.

While the challenging environment is expected to continue, the group will maintain its focus on value creation.

“The group continues to pursue several strategic initiatives aligned to the ‘Moving Agriculture’ strategy that are expected to have far-reaching benefits for the market-place.

“The difficulties in the operating environment are expected to persist and the business will focus on continued sustainable value creation and preservation,” said TSL.-ebusness