Asset management firm Terrace Africa has launched its yet to be listed Real Estate Investment Trust (REIT), the Tigere REIT, which will be the first to be listed on the Zimbabwe Stock Exchange (ZSE).
The property company has been on an aggressive expansion of retail properties with two properties this year and one currently under construction as they prepare to start construction on another property in January 2023.
REITs allow a company to pool investor funds into real estate investments. Investors buy units in the trust and share profits from the investments. Government introduced a law to allow REITs in 2019, and added tax breaks for issuers the following year, hoping to add depth to the capital markets.
Terrace Africa managing director Brett Abrahamse said, “A total of 255,3 million units in the Tigere REIT will be on offer at $28 per unit and at the end of the offer, we hope to have issued all the 719,323,000 units available.
As of listing of the units the preliminary day they expect to go live on the ZSE is November 23.
The Tigere REIT has two properties, including Highland Park, which opened the first phase in June and has 27 retail shops on a lettable area of over 6,000 square metres. It secured tenants such as Pick n Pay, the anchor tenant, plus Puma and Simbisa.
Another Terrace Africa property which is part of the REIT is the US$3,7 million Chinamano Corner which has 13 shops and offices plus a Simbisa fast-food outlet.
According to Tigere Property Fund, about 75 percent of income earned from tenants by the Tigere REIT is USD-linked and occupancies are currently reported at 95 percent.
“As Zimbabwe grows, we as a company are positioning ourselves to be at the front of retail development,” Abrahamse added.
Insurance regulator, the Insurance and Pensions Commission (IPEC), says REITs may help solve one puzzle that Zimbabwean pension funds face – valuation of property investments.
“We think the valuation dilemma is largely due to the absence of a secondary trading market for properties, particularly the unlisted property holdings. Therefore, we are convinced that REITs will go a long way in bringing transparency in the valuation of investment property,” says IPEC chairperson Grace Muradzikwa.
“Unit holders will also have access to our extensive and innovative US$50 million property development pipeline, which comprises exciting commercial projects that are currently in planning or development stage,” Abrahamse says.
Terrace Africa, which is also the developer of Village Walk in Borrowdale and the Marondera Mall, says it has a pipeline of at least 15 more developments. These include malls at the Zimbabwe Agricultural Showgrounds, Ruwa, and Chitungwiza. Beyond Zimbabwe, the company has developed and runs retail projects in Mozambique, Zambia and South Africa – Harare