First Mutual Properties Rides on UN Deals, Says Forex Revenue Will Continue Rolling in

HARARE – First Mutual Properties (FMP) says it is to leverage on a major deal with the United Nations (UN) to generate foreign currency after government’s shock policy U-turn last week, which banned the use of hard currencies in local transactions.

Zimbabwe’s government last week moved to quell a fast deteriorating economic crisis by halting the decade-old multicurrency system and protect consumers from paying for good and services in foreign currency.

Many of them are mostly paid in local RTGS dollars.

The swift changes attracted the curiosity of FMP shareholders who were keen to understand the fate of their investments after the abrupt end of the multicurrency system.

For them, this was important.

FMP is the landlords of UN agencies at the flagship Arundel Office Park in Harare-a key foreign currency generator.

But chairman, Elisha Moyo assured them there were international statutes guaranteeing firms dealing with UN organisations to collect revenue in hard currencies.

“The tenants you refer to are UN organisations. So, it is assumed that the rentals come from the UN headquarters (in Washington),” Moyo said in response to a shareholder during an annual general meeting on Thursday last week.

“So, it is a foreign institution paying rentals in Zimbabwe and the rentals won’t be affected (by Statutory Instrument 142 of 2019, which abolished foreign currency-based transactions in Zimbabwe),” said Moyo.

A range of UN agencies operating in Zimbabwe are housed at FMP’s Arundel Office Park.

The UN is one of FMP’s tenants, occupying over 81 000 square metres of commercial space, which is part of 117 250 square metres of lettable space in the retail and industrial spheres.

Foreign currency revenues will be vital for the Zimbabwe listed counter, one of many real estate outfits battling to offset the turbulences that have been compounded by an inflationary rage that has diminished the purchasing power of Zimbabwe’s troubled currency.

Although occupancy levels at FMP rose marginally during the five months to May, the volatile climate could be a trigger for an exodus from commercial and residential properties across Zimbabwe.

And FMP is renegotiating rentals with its 267 tenants to keep pace with the fast-paced decline.

At least 160 of these have agreed to a rent hike, according to chief executive officer, Christopher Manyowa.

“Management is engaging tenants with a view to review rentals,” he told shareholders.

Moyo spoke as FMP revenue for the five months to May rose by 50 percent to $4,8 million, from $3,2 million during the comparable period in 2018.

Net operating income moved 52 percent to $3,7 million during the period, after ending the previous period at $2,4 million at the same time in 2018, according to a trading update released to shareholders.

Operating profit increased by 49 percent to $2,3 million, from $1,3 million the previous year, according to Manyowa.

Occupancy levels put up a two-percentage point rise to 77 percent during the five months to May, from 75 percent previously.


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