The Economy
The operating environment remained challenging in 2014 due to the adverse macro-economic conditions characterised by persistent illiquidity, deflation and a general slowdown of economic activity across the productive sectors. The local capital markets remained inefficient hindering access to the foreign direct investment required to drive the recapitalisation of the key productive sectors. The resuscitation of the productive sectors remains the catalyst to positive growth, reducing the trade deficit and stimulating demand in the local economy.
The Property Market
The property market remained depressed and was characterised by increasing defaults, stagnating or declining occupancy rates, increasing number of legal evictions, downward rentals reviews and voluntary space surrenders. These fundamentals adversely affected the prospects for upward rent reviews.
Demand for space in the specialised industrial and central business district (“CBD”) office sector remained weak with the CBD offices worst affected. This weak demand for space was also as a result of company closures and retrenchments that resulted in voluntary space surrenders by tenants. However, the demand for retail space remained relatively strong. The effective demand in the economy affected tenant revenues resulting in high defaults as tenants struggled to meet rent and operating cost obligations.
The property sales market was subdued with sales transactions concluded at suppressed prices as liquidity challenges, access to competitive mortgage funding and affordable stock continue to restrict effective demand. Although there has been improved access to mortgage finance from a limited number of building societies at improving tenures, the pricing remains uncompetitive to accelerate commercial development projects. To this end, the major property development activity was limited to the low-to-medium cost residential developments.
Human Capital Development
The Group successfully completed the organisational transformation exercise aimed at realigning its human capital in line with the revised operating structures to enhance operational effectiveness and efficiency.
The Group continues to support its staff members pursuing relevant academic and professional programmes with affordable study loans and training programmes as part of our human capital development initiatives to improve productivity.
Dividend
At a meeting held on 16th February 2015, your Board resolved that a final dividend of 0.055 US cents per share be declared from the profits for the year ended 31 December 2014. The dividend will be payable on or about 24 June 2015 to shareholders registered in the books of the Company at the close of business on 5 June 2015. The share register will be closed from 5 June 2015 to 7 June 2015, both dates inclusive.
Directorate
Mr William Marere was appointed to the board at the last Annual General Meeting held on 27 May 2014, while Dr Christopher U Hokonya and Mrs Nangisai J. Mugabe resigned on the same date. Dr Shasekant Jogi, Mr Joseph Mutizwa and Ms Evlyn Mkondo were appointed to the Board on 11 November 2014. We thank the outgoing directors for their invaluable contribution during their tenure and welcome the new directors to the Board.
Your Board regrets to report the passing on of Mr James K. Gibbons on 26 April 2014. His invaluable contribution to the Board will be greatly missed.
Outlook
We believe the implementation of beneficial national and economic policies will stimulate growth and investment in key productive sectors, creating the demand for real estate. To this end, your Board continues to be optimistic on the country’s medium to long term economic outlook and is positioning the Group to capitalise on opportunities that arise.
Acknowledgements
On behalf of your Board, I appreciate the invaluable support received from all stakeholders.
E.K. Moyo
Chairman
16 February 2015
Related download
FMP.zw – 2014 Annual report.pdf
