Dawn Properties Limited Chief Executive, Mr Justin Dowa (left) and Chairman Mr Phibion Gwatidzo (right) at the recently held AGM.
Source: Biglaw IR

The Zimbabwe Stock Exchange-listed property development company, Dawn Properties Limited board is considering a scheme to build 72, two and three bedroomed garden flats on land that has already been zoned at Marlborough. 

Dawn Properties Chief Executive Officer, Mr Justin Dowa revealed this at the company’s 11th Annual General Meeting held today in a trading update to shareholders for the four-month trading period, 1 April to 31 July 2014.
“The costs are being refined to ensure financial viability. The estimated value of the project is US$8 million,” said Mr Dowa.
Commenting on the group revenue for the period, Mr Dowa said group revenue at US$1.7 million was 3% behind the 2013 equivalent period and 2% below the budget. 

A review of the performance of the operating units showed that rent income from owned assets was 4% down on 2013 but 1% ahead of the budget. 

“Trading conditions deteriorated significantly compared to 2013 weighed down by a faltering domestic market. Occupancies in Q1, which marks the end of the low season, were softer on average. However, this situation is forecast to take a turn for the better as we move into the high season. Activity in the Meetings, Incentives, Conferencing and Exhibitions (MICE) market is expected to have a positive impact on the performance of the resort hotels,” he said.

Mr Dowa said that revenue from the Consultancy business was 2% shy of the 2013 performance and lagged the budget by 5%, as the business has not been spared by the harsh economic conditions. He added that the Property Management cluster, which is the principal driver of the business, suffered badly from the inability of tenants to perform their lease obligations; however, this weak performance was compensated for by a stronger than expected performance in the Transactions Management cluster. Process improvements have been instituted in the Property Management cluster to improve the collection rate.
The group’s operating expenses were 11% below the budget and operating profit for the period was US$404,109 whilst the cost to income ratio was 74%, and Mr Dowa said that in light of constrained revenue generation, rigorous cost controls will continue to be the focus of the group in order to protect profitability.
“Whereas some disposals were considered in the recent past as part of efforts to rationalise the hotels portfolio and diversify risk away from the single sector exposure, the excercise has been put on hold as the timing is not right. Only the Brondesbury Park Hotel is still on the market as immediate prospects are limited in terms of the company’s strategy,” said Mr Dowa as he commented on the group’s plans to put disposals on hold.

Going forward in the year, Mr Dowa said that considerable effort was being directed towards realising the value of the Marlborough land bank. He said some delays had been experienced in obtaining the requisite approval to amend the Local Area Plan to achieve re-zonings and increase densities for the residential development, but it is hoped that the formalities will be completed in the next short while. He further stated that funding options were being explored and negotiations with potential funders were at an advanced stage.

Source: Biglaw IR

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