ZIMBABWE Stock Exchange-listed property firm Mashonaland Holdings says it has deferred the reconfiguration of the iconic Charter House building in Harare into a hotel to the first quarter of 2021. BY FIDELITY MHLANGA In a statement accompanying the company’s financial results for the year ended September 30, 2020 board chairperson, Grace Bema said the Charter House plan was part of several projects whose implementation had been affected by the COVID-19 outbreak. The multi-storey Charter House, which towers above a sea of mostly empty high-end properties in central Harare, is one of the oldest real estate gems in Harare. But it has not been spared by an exodus of businesses from the central business district due to congestion and an influx of informal businesses. Many other buildings within this zone have also been earmarked for reconfiguration into other uses, such as residential properties. “The Charter House reconfiguration to a boutique hotel was equally delayed by the pandemic with on-site works now targeted to begin in Q1 2021 (first quarter of 2021),” Bema said. “However, the Bluff Hill cluster housing project is set to commence following the conclusion of the tender process. Construction of a model house for this project is scheduled for completion in Q1 2021. All the bricks required to complete the development have been procured and delivered on site,” she said. “Overall the COVID-19 pandemic has presented significant challenges to the property market, notably the tourism sector which has been left on its knees due to the global travel restrictions as the world grappled to contain the spread of COVID-19. However, the effect on other property market sub-sectors was not as dire as initially anticipated as reflected by the resilient occupancy and collection levels. However, the scaled down business operations due to the pandemic meant that most could not absorb upward rent reviews in a hyperinflation environment, especially when their businesses had been closed for an extended period due to the national lockdown,” she said. Bema said a key challenge for property developers was that construction costs remained high, while property market values were falling, rendering new developments inviable. “At the same time, building maintenance costs have risen sharply as contractors are indexing costs to the United States dollar based on the parallel market. The limited number of projects has also resulted in higher contractor charges in the absence of economies of scale. Resultantly, property owners have deferred non-critical building maintenance works which will likely have an impact on future values,” she said. Inflation adjusted revenue for the period increased by 30% from $133 million to $173 million, mainly attributed to rent reviews implemented during the year. The growth in occupancy levels from 77% to 79,2% also contributed towards revenue growth. Operating expenses to revenue ratio marginally improved from 50,3% to 50,1% as management exploited cost saving opportunities to protect profits. Operating profit to rev