Demand for real estate remains high in Zim, FBC

Diversified financial services provider, FBC Holdings Limited, says demand for real estate remains strong in the country albeit the challenging environment.

Property remains a hedge amid economic volatility.

Both corporates and individuals are pushing demand in the sector.

“Demand for properties in Zimbabwe remains strong as both individuals and corporates pursue investment and hedging objectives,” said group chairman Herbert Nkala in a performance update for the half year to June 30, 2021.

“Notably, there has been an increased demand for residential property in both rental and purchase segments as companies migrate out of the Central Business District (CBD),” he said.

Real estate consultants Knight Frank, concur there are vast opportunities for investment within the real estate sector, not only in Zimbabwe but across the region.

Knight Frank gives another cluster providing scope for investment. According to the real estate consultants, with the rise in online retailing, catalysed largely by the pandemic and the subsequent boom in demand for storage, distribution and last-mile logistics facilities, requirements for data centres too have flourished across the continent.

“Data centres provide a cheaper and more efficient IT capability than inbuilt servers, which is aiding their popularity. They also offer cloud services and allow organisations to focus on their core functions,” said Knight Frank analyst Boniface Abudho, in their Africa Horizons report, which offers the continent’s unique guide to real estate investment trends and opportunities for 2023/24.

According to the consultants, investors have already recognised the growing demand for additional data centres in Africa.

Apart from commercial real estate and industrial, residential segment, according to market analysts remains firm as accommodation challenges continue to bite especially in the urban centres.

For FBCH, the group has a firm presence in the residential segment across towns catering for all markets. For the medium density market, the group completed 98 units under the Zvishavane Eastlea Project.

Nkala added that in the affluent suburb of Glen Lorne, Harare, there are currently thirteen (13) housing units under construction.

Another project is the Kuwadzana Fontaine Ridge housing project property portfolio, which currently comprises of 267 units.

Meanwhile, the group achieved a profit before tax of $427 billion and a profit after tax of $366 billion during the half year period, which is a reflection of the resilience of the group’s diversified business model and ability to adapt to the challenging environment.

Total income came in at $854 billion during the period under review, which was a 320 percent jump on the $203 billion recorded during the same period last year. The group attributed this growth to transactional, investment and hedging activities.

At $63,4 billion, net interest and related income was consistent with the general lending activities across all lending portfolios. Loans and advances for the period increased by 228 percent to $1,5 trillion.

“The banking subsidiaries of the group continue to lend, in an effort to support customers across major sectors of the economy. Efforts are also underway to mobilise funding at an affordable cost through lines of credit and other institutional depositors and investors,” said Nkala.

According to the group, transactions are now predominantly denominated in foreign currency in line with the general macroeconomic trends and over 80 percent of assets and core revenues are in foreign currency, a position that is expected to subsist until the end of the year.

During the half year period, net transactional revenues amounted to $56,9 billion on account of the group’s innovation and digitalisation thrust.

Nkala said: “The group continues to invest in digital platforms and channels to widen its product offering and enhance customer convenience in line with changes in the technological space.

“Automation and digitalisation initiatives are being pursued to lower the cost to serve our customers.”

The group’s statement of financial position as at 30 June 2023 was $2,9 trillion, representing a growth of 180 percent from 31 December 2022 position.

Shareholders’ funds, improved by 208 percent to $621 billion from 31 December 2022 position of $201 billion.

Nkala indicated focus remains on investing in assets less impacted by currency and inflation developments, to preserve capital whilst concurrently providing a base for underwriting additional business.-ebusinessweekly