Overview

The past few years have been characterised by a deflationary environment with persistent pressure on rentals, occupancy and property values. As a result of these pressures, revenue has been declining, with 2015 registering a 3.53% fall. The diversified nature of our property portfolio has helped reduce the impact of the operating environment on the property portfolio, resulting in the growth in property values in the past five years. In 2015, the pressures on rentals and occupancy levels resulted in a 4.10% impairment on property values. However despite the tough operating environment, the Group has maintained operating profitability. In 2015, net property income after
administration expenses grew by 3.45% driven by declining administration expenses, a function of our ongoing rationalisation of overheads and the exclusion of the once-off staff rationalisation costs that occurred in 2014…

The Economy

The macroeconomic environment continued to weaken in 2015 as Zimbabwe’s economic and financial conditions continued to worsen with GDP growth slowing down to an estimated 1.5% against initial estimates of 3.2% for the year, unemployment rising and economic activity increasingly shifting to the informal sector. Annual inflation at December 2015 was -2.47% as the deflationary pressures continued due to the further weakening of the regional currencies to the United States dollar, as well as corporate entities/retailers lowering prices in a bid to stimulate aggregate demand. As more corporate entities down sized, rationalised operations and or shut down, aggregate demand weakened further reducing disposable income…

Outlook

Investor and business confidence is low, as a result of inadequate infrastructure to support meaningful productive activity thereby limiting economic prospects. There is significant risk of financial distress in the face of persistent de-industrialisation and a growing informal economy. Implementation of structural reforms to improve the operating environment will be the stimulus to attracting foreign direct investment to revive the key productive sectors where demand for commercial real estate is derived…

Acknowledgements

On behalf of your Board, I appreciate the invaluable support received from all stakeholders.

E.K Moyo
Chairman
19 February 2016

Related download
FMP.zw – 2015 Annual report.pdf