ZPI keeps ‘hard-sale’ properties, frets over currency

ZPI keeps ‘hard-sale’ properties, frets over currency
he properties to be sold off in Harare CBD include the NetOne building.

The properties to be sold off in Harare CBD include the NetOne building.

REAL estate firm, Zimre Property Investments (ZPI), is struggling to dispose of its central business district (CBD) properties amid deepening currency problems in the country.

ZPI managing director, Edson Muvingi, said while the firm — which announced it wanted to dispose of most of its CBD portfolio back in 2015 was in talks with interested parties, pricing consensus had been elusive.
“Conclusion of negotiations has been very difficult. On our part we have been looking at the changes, currency changes, and saying if we receive this money, what do we do with it? Are we going to quickly put it on something else because it is the hedging arrangement that we are worried about,” Muvingi said on the side-lines of the firm’s recently-held annual general meeting.
The properties to be sold off are in Mutare, Masvingo and some of its Harare CBD buildings which include the NetOne building and Fidelity Towers, among others.
But Zimbabwe has been battling acute cash shortages for over a year, forcing some risk-hedging investors who are failing to get their cash out of banks into property buys.
The arrangement has been short-changing property companies who argue they end up stuck with virtual money in the bank and, consequently, buying cash at a premium on the black market after selling their properties at a discount.
Muvingi pointed out that due to the exchange rate between United States dollars and bond notes on the parallel market, the property firm was apprehensive of accepting money at this stage.
“We then do not want to be stuck with money which is also deteriorating. You know what is happening between bond notes and the US dollar. It will be difficult for us to convert the money,” said Muvingi.
The ZPI boss also highlighted that the group had since opted to hold onto its properties.
“The decision is a difficult one. We have been negotiating but some of the prices we have been getting are not what we are expecting so we would rather delay than dispose and hold onto money that does not add value to us,” he said.
Initially, capital raised from the disposals was earmarked for acquisition of more strategic land for office parks and development.
According to Old Mutual Securities (OM Securities), local property valuations are set to benefit from risk-hedging investors as they turn to the property market on the back of cash shortages.
In the wake of currency issues, other players in the property sector have decided to hold onto their properties in anticipation of better market conditions in the future. While others had initially built for sale, they have since decided to rent the properties out instead.
Just last year, listed short term insurer, NicozDiamond, resorted to renting out its Hatfield Diamond Villas as the project’s uptake had been “below expectation” in the face of declining disposable incomes.

  • Fresh

    Did ZPI buy Netone Building (Kopje Plaza) from CAIPF?

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