Dawn Properties Limited, which is now under the wing of listed hospitality giant, African Sun, expects the nascent upturn in the fortunes of the local tourism sector to work in its favour.
From a long-term impact perspective, the travel and hospitality industries will remain the hardest hit by Covid-19 as players in these sectors will need to cope with the attendant psychological and structural changes.
And this is further highlighted by the recent re-impositions of lockdowns in the US and Europe as Covid-19 cases continue to tick up.
But in Zimbabwe, largely successful containment of the highly infectious virus, has seen Government easing on lockdown restrictions to near normal levels. And with its tourism facilities, including domestic and limited international flights, have been allowed to resume.
In its third quarter report to September 30, 2020 Dawn Properties said the restart of local tourism will drive business going forward.
“The reopening of the tourism sector by the Government of Zimbabwe has already started yielding positive results.
“As at October 1, 2020, all the African Sun-run hotels are back in operation and occupancies are steadily increasing,” said Dawn.
“In the short to medium term, tourism recovery in Zimbabwe is anticipated to be driven by domestic tourism.”
Dawn owns hotels that are being leased by African Sun. African Sun is also controlled by Arden Capital.
Last month, Dawn Properties’ shareholders approved a resolution that will see the company being acquired by hotel group African Sun Limited in exchange for shares in the hotelier.
With regards to this acquisition, the entire issued ordinary shares of Dawn will be acquired in exchange for an issuance of the African Sun Limited ordinary shares listed on the Zimbabwe Stock Exchange through an issuance of one African Sun ordinary share for every 3 988 075 746 Dawn ordinary shares held. But the group is expecting uplift from its other property portfolios.
“Servicing of 65 stands under Phase 1A of Marlborough Sunset Views (MSV), measuring on average 2,000 square metres each, was completed in July 2020. As at September 30, 2020, the group had sold eight stands,” reported Dawn.
“Subsequent to September 30, 2020, 12 additional stand sales were completed bringing the total number of stands sold to date to 20. The development of Phase 1B, which is expected to deliver 53 stands of approximately similar size as under Phase 1A, will commence in the near future.”
Management said the property consultancy segment recorded a 10 percent decline in revenues to at $43,7 million.
The Valuations and Advisory cluster contributed the most to this revenue line, taking over from the property management cluster.
“The lower than prior year performance was mainly due to subdued business during the lockdown period as well as the loss of a significant client, effective 31 March 2020,” said the group.
According to the trading update, the Valuations and Advisory cluster contributed 59 percent of the total property consultancy revenue, while the property management cluster contributed 32 percent.
Meanwhile, the group’s hotel revenue for the nine months ended September 30, 2020, at $65,3 million, was 54 percent lower than the revenue achieved during the same period last year, due to depressed occupancies caused by the pandemic.