Published: 09 May 2025

First Mutual Properties (FMP) has reported a decline in rental collection rates for the year 2024, with tenant payments slipping by 10 percentage points to 75%, down from 85% in 2023, as economic pressures continue to weigh on tenants' ability to meet obligations.

Despite the drop, the property investment firm managed to cushion losses through an increase in US dollar-denominated leases and higher income from property services, according to its annual financial results for the year ended December 31, 2024.

"Due to tenants' financial challenges, rental collection rates fell from 85% in 2023 to 75% in 2024. Management is working closely with tenants to resolve the arrears. There has been an elevated focus on tenant and portfolio diversification," said FMP chairperson Elisha Moyo in a statement.

To address the challenges, FMP has intensified tenant engagement to recover arrears and has ramped up efforts to diversify its tenant base and property portfolio. The company also spent US$945,231 on infrastructure maintenance during the year, reaffirming its commitment to maintaining high-quality, secure properties.

Moyo said the commercial property sector had shown moderate growth, with demand for retail and office space in major urban centres driving momentum. He also noted a shift toward sustainable construction practices, including green building technologies, solar power, and water recycling systems.

"Public-private partnerships that leverage private sector expertise for large-scale projects are key to the sustainable development of Zimbabwe's property sector," Moyo added.

While most of FMP's rental payments are made in US dollars, operational costs — including electricity and municipal charges — continue to be settled in local currency, aligning with Zimbabwe's regulatory framework.

The company also highlighted continued high vacancy rates in the central business district (CBD), as tenants migrate to suburban office parks and modern spaces. Businesses are increasingly avoiding congested city areas with parking shortages and deteriorating infrastructure, such as faulty lifts and air-conditioning systems.

FMP's property portfolio was valued at approximately US$132.9 million at the end of 2024. Its revenue rose by 31% to US$9.02 million, mainly attributed to increased project management fees, pure US dollar rentals, and timely rental adjustments.

Moyo also pointed to a wave of real estate developments in urban and tourism hotspots, particularly in Victoria Falls, as well as a rising trend in gated communities, townhouses, and apartment complexes in affluent Harare suburbs. Mixed-use developments combining residential, retail, and commercial elements are also gaining popularity.

He said local government initiatives like the Avondale and ED Mnangagwa Road Local Development Plans were helping shape market trends by allowing mixed-use developments along major transport corridors.
- the independent

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