Overview of Operating Environment
The operating environment remained stable, largely due to the authorities’ tight monetary and fiscal policies. The country continued to use a multi-currency system, with the US dollar predominantly used for commercial transactions such as property rentals and sales. Year-on-year inflation fell to 1.30%, down from 12.39% in December 2025. In March 2026, the interbank exchange rate was US$1: ZWG25.32, slightly stronger than US$1: ZWG26.98 in the last quarter of 2025. Despite this stability, consumer demand remained weak in some sectors, leading to subdued trading performance across our tenant base.
Domestic challenges were compounded by external shocks, most notably the Middle East conflict, which triggered a sharp rise in global energy prices. Disruptions to supply routes impeded the free flow of cargo, leading to delays, longer routes, and a significant increase in transport and logistics costs. As a net importer of fuel, Zimbabwe was not spared the negative effects of these global developments. The pass-through effect of rising energy costs is being felt in Zimbabwe, an unfortunate development that has eroded consumer purchasing power and constrained business activity.
Demand for assets aligned with health services, logistics, and neighbourhood retail remained firm, reflecting their defensive characteristics in the current environment. However, exposure to retail required active tenant engagement and disciplined lease management to sustain occupancy and collections. The continued rise in US dollar-denominated rentals improved cash flow forecasting and supported portfolio valuations.
Property Market Overview
The Zimbabwean property market in Q1 2026 was relatively stable in nominal terms, underpinned by persistent demand for real assets as a hedge against currency volatility. In the commercial segment, performance was mixed, with selective demand for modern, high-quality spaces, well-located retail and logistics space, while office occupancy, particularly for older stock, remained under pressure. In light of this, property owners have continued to repurpose old buildings to cater for small and medium-sized enterprises (SMEs) and start-ups that require small work spaces.
Activity in buying and selling was generally subdued, with limited transaction volumes reflecting constrained liquidity and cautious investor sentiment. Residential demand remained concentrated in established urban centres such as Harare and Bulawayo, although affordability pressures and limited access to long-term financing weighed down market activity. Overall, the market is expected to track broader economic and currency dynamics in the outlook.
Financial Performance Highlights
Revenue for the quarter increased by 7% compared with the same period in the prior year, driven by rent reviews and a 0.7% increase in occupancy levels. Net property income rose by 30% in the quarter, owing to higher rental income and a significant reduction in the provision for credit losses, reflecting improved collections. A total of US$ 0.135 million was spent on property maintenance during the quarter. Investment properties as at 31 March 2026 stood at US$ 133 million.
Developments
We are pleased to report that a blue chip tenant has taken occupation of the new office block at Arundel Office Park during the quarter. The business continues to explore development opportunities to enhance shareholder value. Modern developments, such as Arundel Office Park and Golden Stairs, remain central to your Company’s strategic development thrust.
Sustainability
The Group continues to focus on rolling out green sustainability initiatives across selected properties while enhancing sustainability-related reporting.
Dividend
No dividend has been declared for the quarter.
Outlook
The business outlook remains cautiously optimistic, with expectations of ongoing economic growth, lower inflation, and a stable currency. Improved macroeconomic conditions are likely to boost business confidence and planning certainty. In addition, policy discipline and consistency will help promote investment in key sectors. However, the operating environment will likely remain tough, hence the need for your Company to maintain effective management of costs, liquidity, and efficiency. Management will also focus on enhancing revenue-generating capacity, market diversification, strengthening asset resilience, and maintaining prudent risk management practices to sustainably increase shareholder value.
By order of the Board
Mrs Dulcie Kandwe
Company Secretary
