Mash Holdings pins hopes on portfolio diversification

PROPERTY research and development firm, Mashonaland Holdings, says it remains focused on implementing its portfolio diversification strategy in a bid to ensure sustainable growth and delivery of its shareholder value.

The firm has been on a portfolio diversification drive as it seeks to come up with a more balanced portfolio.

On the other hand, Mashonaland Holdings has lately been hinting at maintaining focus on portfolio optimisation and diversification to cut losses associated with the concentration of office properties in the central business district.

Earlier last year Mashonaland Holdings indicated its intent to reduce CBD office space to 29 percent in five years’ time from the present 55 percent of the portfolio.

The firm indicated that it is also striving to grow office park space to 23 percent and retail space to 18 percent in those five years.

Mashonaland Holdings’ current portfolio structure is dominated by office space at 55 percent followed by Industrial at 12 percent, retail at seven percent while residential and health comprise eight percent apiece.

Mid last year the property firm embarked on construction of a US$15 million Pomona Wholesale Centre as it continues to respond to market needs.

The project’s civil works are scheduled to take 18 months from its commencement date of July 2023 and works are already in progress.

Pomona Commercial Centre will deliver 14,000 square metres of lettable space consisting of wholesaling and flexible warehousing.

Last year the firm also managed to complete and hand over MashView Gardens housing units which were built in three phases.

Mashonaland Holdings also embarked on a project that sought to reconfigure retail space at Chiyedza House to create 32 retail shops for Small to Medium Enterprises.

Renovations of this property were completed in the third quarter of 2023.

According to Mashonaland Holdings developments in its pipeline include the construction of student accommodation, sub-urban office parks and hospitality sector investments.

“Looking ahead, the group remains focused on implementing its portfolio diversification strategy, which will enable sustainable growth and delivery of shareholder value. The group will continue to put in place measures to manage risks associated with the new developments.

“Mashonaland Holdings is set to stick with its portfolio diversification strategy as works on the Pomona Wholesale Center is on course to be completed by the fourth quarter of 2024,” said Egnes Madhaka the group’s company secretary.

In the trading update for the quarter to September 2023 Mashonaland Holdings indicated that it continues to see sustained positive performance in the suburban retail sector supported by high occupancies and optimal yields in newly constructed neighborhood malls.

As per the norm, the industrial sector continued to outperform traditional real estate sectors with occupancies averaging 95 percent albeit considerable negative effects from power supply challenges, which continue to have an impact on tenant’s cost of occupancy.

“The CBD office sector continues to struggle with high voids as occupants exit the CBD preferring suburban office locations,” she said.

Mashonaland Holdings chief executive officer, Gibson Mapfidza, is on record saying,”…new developments are motivated by the need to respond to market needs.”

Meanwhile in its trading update for the quarter ended 30 September 2023, the company’s topline increased 167 percent to $15, 7 billion driven by increased space absorption in the portfolio and project sales.

Revenue surged by 36 percent In USD terms from US$3, 3 million in the prior comparable period to US$4, 6 million as the group is now earning 74 percent of its revenue in foreign currency.

As a result, the group managed to offset the losses that come with Zimbabwe dollar rentals.

In the same quarter, operating profit increased by 42 percent driven by the surge in revenue performance.

On its property development projects the Group’s Milton Park Hospital facility is expected to start generating income under the long-term lease from January 2024.-businessweekly