Zimre records strong growth in rental revenue
ZIMRE Holdings (ZHL) has strategically positioned itself in the evolving property sector to enhance its property portfolio nationwide through the Eagle Real Estate Investment Trust (REIT), focusing on projects in Victoria Falls and Mazowe.
This development saw the group’s rental revenue surge to ZWL13 billion in 2023 in inflation-adjusted terms, contributing 96 percent to the total revenue of the cluster. The group added that its strategy remains anchored on delivering a strong cash wallet by driving a cost-effective insurance float and increasing the contribution from regional investments.
ZHL is a diversified investment holding company with core competencies in insurance and property. The company has investments in Zimbabwe and the Southern African region. In the 2023 annual report, Mr Stanley Kudenga, ZHL group chief executive officer, said as the property sector evolves and property development booms around the country, the ZHL Group took strategic positions to transform the ZHL property portfolio and make its mark across the country in terms of infrastructure development.
“These moves will primarily be effected through the Eagle Real Estate Investment Trust (REIT) which houses two major projects in Mazowe and Victoria Falls. The Group’s property portfolio recorded a 137 percent growth in rental revenue (ZWL13 billion in 2023) in inflation-adjusted terms which contributed 96 percent to the cluster’s total revenue,” said Mr Kudenga.
According to the report, the Group’s Eagle Real Estate Investment Trust (REIT) attained Prescribed Asset Status from the Insurance and Pensions Commission of Zimbabwe (Ipec) post the reporting period. It is anticipated that the Eagle REIT will bring much-needed liquidity to the real estate market especially for Zimbabwe’s pensions community.
In inflation-adjusted terms, the Group’s insurance contract revenue experienced 140 percent increase reaching ZWL255,0 billion from ZWL106,3 billion. Under historical cost, a growth of 777 percent was achieved, with the revenue surging from ZWL16,8 billion to ZWL147,5 billion compared to the same period in the previous year.
“This strong growth is attributable to the Group’s local reinsurance and pensions business operations, which collectively contributed 78 percent (2022: 83 percent) to the total
premiums written during the year.
“The premium income growth was primarily driven by the expansion into new markets, the introduction of innovative product offerings and increased new product acceptance by the market.”
In addition, the regional reinsurance business operations contributed to the overall insurance contract revenue, with premiums accounting for 17 percent (2022: eight percent) of the total premium inflows, stemming from new business acquisitions and increased external business support.
This was underpinned by improved underwriting capacity following successful balance sheet enhancement strategies. The group says it has adopted a responsible management approach that goes beyond financial considerations when assessing investment opportunities.
The company is seeking out for investments that align with its values, such as sustainable energy projects, socially responsible enterprises, and businesses that prioritise ethical practices.
“The Group recognises its role in national development and actively contributes to it in various ways. We create job opportunities, which not only support individuals and their families but also contribute to the overall economic growth of the country.
“Additionally, we fulfil our tax obligations, making significant contributions to national revenue. Payment of tax also supports Government initiatives and public services that benefit society as a whole.
“Further, we contribute to the maintenance of public infrastructure through partnerships with local authorities. The Group is in the process of re-establishing itself as a key architect in the Zimbabwean infrastructure space.” In the period under review, a total of $22 billion in taxes was paid to the Government.-chroncile
