FIRST Mutual Properties (First Mutual) says despite the current state of economic unpredictability fuelled by geopolitical unrest and erratic economic headwinds, it is committed to executing its strategy.
The company explained its strategy in a statement that accompanied its financial results for the year ended December 31, 2022.
The strategy involves building a sustainable and well-diversified business portfolio, completing new projects on time, within budget, and with an acceptable level of quality, as well as adding value for all of its stakeholders.
“The company remains focused on delivering on its strategy despite the environmental uncertainty caused by the global geopolitical tensions as well as a volatile and complex economic environment,” said the company.
The property company also indicated that in the period under review, it strived to maintain buildings in letable and safe conditions.
Against this strategic imperative, $528 million was deployed towards maintenance of buildings. This comes as the property market fundamentals were mixed during the year.
The leasing market for commercial space was the most active segment, with buoyant activity in the retail and industrial sectors.
First Mutual said during the period it experienced a number of challenges, most of which were market related.
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“The central business district office recorded the highest vacancy rates forcing most owners to remodel their properties to cater for the small and medium enterprises sector. Further, the retail, industrial and residential sectors enjoyed relatively huge activity during the year.
“In contrast, commercial property transactions were low due to huge investment requirements. Limited commercial property developments seen during the period under review have largely been self-funded, and are being used as a hedge against currency and inflation risks as well as possible future rental increases,” the property firm said.
During the review period, the company’s foreign and local currency rental mix was 70% to 30%, enabling the company to preserve value from foreign currency and inflation risks.
“The group’s inflation adjusted net property income after administration expenses was $140,5 million despite a 42% growth in inflation adjusted revenue to $2,9 billion .In historical terms, revenue grew by 342% from $475,4 million in December 2021 to $2,1 billion largely due to the repricing of rentals and relatively good occupancy that stood at 85,5%,” the company said.
