Pearl Properties revenue down 10% in Q1 as shareholders agree to name change.
HARARE- Pearl Properties, revenue in the first quarter was 10% below prior year at $2.4m mainly due to significant rent reductions within the portfolio and reduced occupancies
Group managing director Christopher Manyowa in a trading update said reductions in occupancy level and the voids have been going up mainly due to tenant voluntary vacations and in some cases they had to be evicted.
“Some of our tenants have approached us and negotiated rent reviews and some of this has actually impacted on our revenue.”
During the period, property expenses ballooned by 63% to $388 000 compared to $237 000 mainly driven by costs incurred through re-investments as a landlord to maintain the properties.
“We incurred the costs in terms of re-investing into the portfolio as a strategy we have had to embark on it to ensure that our property remain in good shape,” said Manyowa. He added that under this current environment, tenants expect a lot from the landlord which includes maintenance and lower rentals.
The other reason for the increase in property expenses are property recovery costs as wells as void maintenance and related costs.
According to Manyowa, allowances for credit losses reduced 23% at $220,000 compared to $289,000 in prior period.
“The reason for this position is that our debtor’s book was carrying significant debtors, some of them have been put under liquidation and as a result provisioned for such losses”
Taking into account the property expenses and allowance for credit losses, net property income position was 18% lower than prior period at $1.8 mln.
Meanwhile, overall expenses were 60% below prior year due to savings realised from staff costs as well as administrative expenses. As a result, profit position for the period was 22% lower than prior year.
During the period under review, rental yield declined to 6.29% from 6.91% in prior year largely due to lower revenues. Average rent per square meter declined during the period while occupancy was at 72% down from 74% same comparable period.
Manyowa said going forward the group will pay attention to ensuring sustainable revenue generation as well as retaining tenants.
Shareholders approved the name change from Pearl Properties (2006) Limited to First Mutual Properties.