Mash Holdings to review rentals downwards

Mash Holdings to review rentals downwards
Published: 28 May 2014
Listed property concern Mashonaland Holdings says it is considering reviewing rentals for its properties downwards in response to the high default and void rates in sector.

Speaking at the Imara Investment conference in Harare today, senior property manager David Mutemachani said the rental market was characterised by high rates of vacancies, defaults as well as lack of long term mortgage finance.

"For the first time since 2009, we are talking of reviewing rent downwards and giving our tenants a rent break so that we can retain the good tenants," he said.

He said the rent holiday would reprieve tenants from paying rent for a certain period as incentive for paying rent on time.

He said voids in 2013 were at 15 percent while the vacancy levels were also high with the office sector having the highest levels of vacancies as most companies have been downsizing.

Mutemachani said the business was receiving a boost from leasing small industrial space which are being taken up by small companies in the informal sector and mostly for warehousing.

"Again this is a reflection of the current economic situation which has resulted in the growth of the informal sector and a reliance on imports which need to be stored in warehouses," he said.

Mash Holdings is not the only property company which has changed its thrust on industrial space. Pearl Properties has also focused its industrial space on SMEs and warehousing as the voids began to weigh down operations.

Mutemachani said his company has earmarked US$65 million worth of development in the sector to be implemented as soon as investment comes through. "The property sector is poised for growth and this will be through pro-investment policies which will boost investor confidence and release capital inflows," he said.

He said the company currently has a land bank of about 58,5 hectares of prime land which will be used to cover growth in the areas for office parks, residential for on-selling and industrial with high initial yield.

He said the projects would be funded through public private partnerships for infrastructure projects.
- BH24


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