Government sits on 40% of occupancy in MPICO’s properties; Accumulating K3.8 billion in rental arrears

Jiya making her presentation at the AGM

* The defaulting on arrears were impacting the cash flows, competitiveness and cost of maintenance

* The government has since committed to settle K3.1 billion after a legal redress

By Steven Mkweteza, Correspondent

MPICO’s Plc, the country’s leading real estate and properties managing portfolio, says it has now put in place a number of segment-based  strategies aimed at diversifying sources of revenues to increase profitability.

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This is to ensure that government does not sit on 40% of occupancy in its properties, that has led the accumulation of K3.8 billion in rental arrears, saying the outstanding rental arrears to its properties is one of the main challenges affecting MPICO’s expansion plans.

This was disclosed on Tuesday in Blantyre by MPICO Plc board chairperson, Edith Jiya in an interview on the sidelines of the group’s 49th annual general meeting (AGM), saying they are looking ensuring that the government should not to be their “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, while adding that the government has since committed to settle K3.1 billion after a legal redress.

Jiya said the defaulting on arrears were impacting the cash flows, competitiveness and cost of maintainance on the real estate and properties management.

On the other hand, Jiya further attributed CoVID-19, inflation and power outrages as other major challenges that impacted the group’s business on additional operating costs.

She also said despite operating in a difficult economic environment, the business has been resilient after recording an increase in rentals by 5%, 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 K6.4 billion —  up from K4.3 billion in 2020.

MPICO Plc is listed on the Malawi Stock Exchange trading in real estate and properties.

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