FBC Building Society to expand land bank

FBC Building Society to expand land bank
Published: 31 August 2017
FBC Holdings' mortgage unit, FBC Building Society (FBCBS), is in the market for land to replenish its depleted land bank, with a bias towards high density land.

Group chief executive officer, John Mushayavanhu, last week said the unit, which has spent $47,5 million on housing developments since dollarisation, was looking at increasing its land bank in an attempt to insulate the group against Zimbabwe's firming inflationary pressures.

"In the past, we have seen the building society's contribution to profitability increasing. It is now the biggest contributor to profitability so the idea is to expand on this through acquisition of more real assets," Mushayavanhu told an analysts briefing on the group's first half results.

During the first six months to June 30, 2017, FBCBS spent $6,1 million on 52 housing units. However, since dollarisation, the property developer has delivered 1 011 units ranging from low to high density offerings.

In negotiations with various local authorities, Mushavanhu anticipates the group will close some acquisitions by year end.

According to Mushayavanhu, FBCBS, which had traditionally targeted middle to high income residential developments, will also venture into high density projects in light of the country's economic challenges.

"Our land bank is depleting. We now are aggressively in the market looking for land and this time we are also looking for high density land because we want to do low income houses," he said.

During the first half of the current financial year, FBCBS completed 68 housing units comprising of 16 units at its Masotsha Ndlovu phase five project, 16 in Greendale and 36 others in Mt Pleasant.

The FBCBS land bank is made up of 9,6 acres of residential stands in Glen Lorne, 1 1364 hectares which has been converted into 48 duplex units in Mt Pleasant's St Kilda Road and a 7 336 square meter residential property now occupied by 15 cluster units in the capital.

According to Mushayavanhu, the group, which has 10 residential development projects, is driving a high density strategy to match the tough economic environment which has seen tight liquidity and low disposable incomes prevailing in the property market.

At the end of first half last year, FBCBS spent over $37 million in mortgage loans to fund its housing projects across the country after delivering more than 900 housing units into the property market since 2009.

He noted the group was yet to dispose of its 16 residential stands in Springvale and Helensvale as it increasingly becomes difficult to sell high-end properties.

The country's inflation has been steadily firming, forcing risk-hedging investors and property firms to invest in the property sector to preserve value.

Others have even stopped property disposals in favour of rentals.
- fingaz
Tags: FBC,


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