Pearl Properties is working on twin projects involving the construction of a cluster housing project and refurbishment of a shopping centre in Kamfisa estimated at over $4 million.

The housing project is estimated to cost $2,7 million and scheduled to be completed within eight months starting September this year.

Speaking at the company’s annual general meeting, general manager (finance and administration) Peddy Chigunduru said the housing projects entail the construction of 38 cluster houses.

“Construction of cluster houses will commence in September 2011 and completion will be in eight months,” said Chigunduru.

“The company is working on another Kamfinsa Shopping Centre refurbishment project estimated at $1,3 million and is expected to be accomplished in the fourth quarter of this year.”

He said the company was strategically positioned to exploit opportunities in the property market, through its existing green field and brown field sites which are ready for development.

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The company recorded improved rental performance in 2011 in spite of the difficult operating environment with average rental per square up to $6,20 from $5,59 in the previous year.

Rental yields achieved for the first quarter ended March 31 2011 were 8,75% from 10,13% in 2010.

Collection rates were 62,1% from 84,3% from the previous year and vacancy rates was up to 14,86% from 12,6% in 2010.

Office Park complex contributed 35% to revenue collections.

During the period under review rentals income increased to $1 901,091 compared to $1 547,576 in the comparative period last year indicating a 23% jump.

Profit after tax was 97% up to $1, 048 407 from $531 262. Chigunduru said rental performance continue to lag regional benchmarks, largely reflecting the constrained performance of the local economy.

“However, the local industry has registered significant improvements in rental performance following the introduction of the multi-currency regime resulting in improved re-investment in the properties in the form of property maintenance and refurbishment programmes,” said Chigunduru

He said the constrained liquidity in the economy restricted activity in the property market to entry level transaction, whilst the limited activity in the top end of the market reflected the adverse impact of lack of meaningful supply of quality property stock and mortgage finance.

He said limited supply meant that pricing of available stock of properties was largely beyond the reach of the target market.

“There is lack of meaningful activity on new property developments as the adverse impact of the slow macroeconomic environment curtailed the mobilisation of property finance from local financial institutions,” he said.

Growth in rental was experienced across all the sectors, as management re-priced lettable space to competitive levels required to meet the target re-investment rate as well as support the maintenance programmes.

“The company continues to seek opportunities to manage proactively deferred maintenance, deliberate tenant mix restructuring and legal evictions,” said Chigundura.