First Mutual Properties Limited (FM Properties) has returned to profitability, buoyed by increased dollarisation of rental income, which improved cash flow predictability and portfolio valuations.
The group, which gave a measured signal of recovery in Zimbabwe’s property sector, recorded a US$3.9 million profit after tax for the year ended 31 December 2025, reversing a substantial loss of US$57.3 million incurred prior year.
The turnaround was largely driven by fair value gains on investment properties, reflecting stabilising asset prices after the currency-induced distortions of 2024.
“The increased dollarisation of rental income improved cash flow predictability and portfolio valuations,” FM Properties said, highlighting a broader trend across Zimbabwe’s real estate sector, where US dollar-denominated leases are increasingly becoming the norm.
But beneath the headline recovery lies a more nuanced picture.
Revenue remained broadly flat at US$8.97 million, while net property income declined slightly to US$4.57 million, underscoring the persistent pressures on rental performance.
Management acknowledged that “consumer demand remained weak in some sectors,” pointing to uneven trading conditions among tenants.
The group’s performance highlights a market increasingly defined by divergence rather than uniform recovery.
Demand has strengthened in sectors tied to essential services, logistics and neighbourhood retail, while discretionary retail and traditional central business district (CBD) office space continue to face headwinds.
Indeed, the office market is undergoing a quiet but significant transformation.
Vacancy rates in Harare’s CBD remain elevated, in some cases reaching between 40 and 60 percent, as corporates migrate toward suburban office parks offering modern infrastructure and more reliable utilities.
This shift, the company noted, has resulted in “spaces leased much more quickly” outside the city centre.
Against this backdrop, FM Properties has leaned on diversification as a stabilising strategy.
Its portfolio, spanning commercial, retail, industrial, office and residential assets, has helped cushion volatility, while a deliberate focus on tenant mix and engagement has supported relatively resilient rental collections, which stood at 80 percent, with average occupancy at 84 percent.
Asset values edged higher, with the property portfolio independently valued at US$136.1 million, a modest 2.35 percent increase year-on-year.
Investment in maintenance and infrastructure – reaching nearly US$858,000 – further underpinned asset quality and long-term competitiveness.
Despite the return to profitability, the board adopted a cautious stance on shareholder returns, declaring no final dividend for the period.
This reflects a continued emphasis on liquidity preservation and balance sheet strength in an environment still marked by uncertainty.
In the outlook, management struck a guardedly optimistic tone, citing expectations of “continued economic growth, moderate inflation and relative currency stability.”
However, it also acknowledged that the operating environment will remain demanding, requiring sustained focus on cost control, tenant retention and portfolio resilience. – TML