Shoppers spent money at Highland Park shopping mall in record numbers in the last quarter, helping the Tigere property fund boost its income.
The Tigere REIT, listed on the Zimbabwe Stock Exchange, is paying out US$372,112 in dividends to unit holders for the period. The fund includes Highland Park Phase 1 and Chinamano Corner. The US$10.8 million Highland Park phase 2 was added this year, and began delivering benefits in September.
“Occupancy at Highland Park Phase 1 and Chinamano Corner remained at 100% during the period under review. August saw record turnovers at Highland Park Shopping Centre with most tenants surpassing their December 2023 Turnover levels,” Tigere says in its latest update. “This was owing to school holidays and a five-weekend month which included the Heroes Holiday.”
The September ZiG devaluation brought a measure of relief to anchor tenant, Pick n Pay, one of the formal retailers under pressure from the skewed exchange rate. Tigere says: “The devaluation of the ZWG at the tail-end of the quarter has been well received by retailers and we foresee a recovery in the main anchor’s sales volumes during Q4.”
Tenants at the malls pay part of their rent based on their sales. This means Tigere makes more money when shops enjoy higher business. Rent per square metre rose to US$19.24 in September from US$17.75 in the same month last year. Tigere expects more people to visit the mall going into the last quarter of the year, earnings which will now also include Highland Park phase 2. Close to 40% of Highland Park Phase 2’s income is generated by Simbisa Brands’ food outlets.
“As we approach the festive season, an uplift in foot traffic at the food and beverage section of the mall is firmly anticipated, which should provide a decent turnover rental boost to earnings.”
What is Tigere saying about the state of the property market? The fund says there were many new projects being planned and developed in the quarter. The need to preserve value plus the unstable exchange rate is driving pricing in the sector, including rentals. Well located malls are thriving, but cost cutting is key.
“However, as new property developments open to the public, the demand/supply metric shifts in favour of the tenant. We believe that well-located, quality assets will retain their premium rental status. Prudent operating cost management will ultimately determine the pattern of yields generated across the sector.”
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