By Steven Godfrey Mkweteza, Contributor
The country’s major real estate and properties managing portfolio, Mpico Plc, has attributed government outstanding rental arrears to its properties as one of the main challenges affecting its plans of expansion.
Mpico Plc board chairperson, Edith Jiya, confirmed in an interview on the sidelines of the group’s 49th annual general meeting (AGM) held in Blantyre.
However, Jiya said the group has now put in place a number of segment based strategies aimed at diversifying sources of revenues to increase profitability and ensure that government does not sit on 40% of occupancy in its properties.
“We are looking at making government not to be our single main client as before due to outstanding rental arrears it has been incurring. We want the government to have at least 20% of occupancy,’’ Jiya said
According to Jiya, government has so far committed to settle MK3.1 billion after a legal redress.
Jiya said the defaulting on arrears was impacting the cash flows, competitiveness and cost of maintenance on the real estate and properties managing business.
On the other hand, Jiya further mentioned Covid-19, inflation and power outrages as the other major challenges impacted the groups business on additional operating costs.
The board chairperson said despite operating in a difficult economic environment, the business has been resilient after recording an increase in rentals by 5 percent, with the outlook projecting continued growth.
According to the results of the group for the year ended, December, 31, 2021, the group has registered a profit after tax of MK6.4 billion in 2021, up from Mk 4.3 billion in 2020.
Mpico Plc is the Malawi stock exchange listed group, trading in real estate and properties.