eBusiness Weekly
Nelson Gahadza
Mashonaland Holdings says it is set to dispose of the Charter House building for US$7,4 million after plans to reconfigure the building into a massive hotel with a partner, Touch Road International from China, collapsed due to the impact of Covid-19.
The group in 2018 had planned to spend US$10 million transforming the building into a boutique hotel but project contractor, Touch Road International, was unable to move during the height of the pandemic restriction in China.
“We dreamt in 2019 to convert our building into a hotel. We went out looking for an operator and we got Touch Road International, we signed our MOU, Covid-19 came and disrupted this plan.
They said our business in China has been so much affected, so we want to rebuild in China before we come to Zimbabwe.
“We then said we need to terminate the MOU and find other avenues to look at the asset and look to say how else we can revitalise it.
“We then found a very compelling offer of US$7,4 million where you know your book value and see the offer is north of your book value,” Gibson Mapfidza, the company’s managing director said at an analyst briefing on Wednesday.
Mash Holdings CEO Gibson Mapfidza
He said the offer came through last year December, and the parties have already signed agreements and are signing for other processes.
“The property is currently 20 percent occupied, so when you look at it in terms of performance, it is not at the rate that we wanted,” said Mapfidza.
He said the disposal also reduces the Group’s CBD concentration which then has been a stumbling block in achieving desired growth.
“The proceeds will also raise funding for onward project development,” Mapfidza said. He added that in the market, there is huge demand for space and the group’s model provides for that.
“The need that we see in the market is demand for space and we have a business model that will provide the need at a value proposition that we are able to make profits as well.
“In the spaces we are operating in, we are in the CBD but we are venturing into office parks as well as retail and also residential and health.
“We have taken these measures to address the low office occupancy level in the CBD and we are looking at what more we can do with our properties,” said Mapfidza.
At Chiyedza House, Mapfidza said the group is doing what is called flex letting which is an idea to try and densify occupancies in buildings.
“It was started in America some 20 years ago. We intended to start with ZB Life Towers in 2019, and we were affected by Covid-19.
“We then moved to Chiedza House where we are happy that we are able to offer the very same service that we are able to offer to SMEs and the informal sector,” he said.
In terms of property projects under developments, Mapfidza said the Group launched the Mashview Gardens cluster housing project in Bluff Hill in Harare.
The project, which comprises 25 modern housing units, was fully sold off plan and construction works are in progress.
“The project is targeted for completion in the last quarter of the ensuing financial year,” he said.
On the 12 Van Praagh Day Hospital Project, the group secured an agreement to develop and lease a hospital at one of its properties in Milton Park Harare.
“A change of use permit from residential to medical use was secured in December 2021. Pre-construction works are currently in progress with construction of the healthcare facility targeted to commence in the second quarter of 2022,” she said.
At Windsor Park Ruwa residential stand sales, Mapfidza said following the securing of a certificate of compliance from the Ruwa Town Board, the Group commenced the disposals for the 24 fully serviced medium density residential stands averaging 800-1100 square meters.
Mapfidza added that funds raised from the disposal of these stands are anticipated to create further liquidity to support other strategic development works.
