Online Reporter
Nelson Gahadza
ZIMBABWE’S listed real estate investment trusts (REITs) continued to attract investor interest in July, with trading activity across the Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX) remaining well above levels recorded at the beginning of the year, despite mixed monthly performance.
The contrasting movements on the two exchanges point to an increasingly active, although still developing, listed property market as investors balance the search for income-generating assets against concerns over valuations, liquidity and the broader investment environment.
On the VFEX, REIT turnover fell sharply to US$952 553,94 in July, down by 64,8 percent from US$2,7 million recorded in June.
Trading volumes followed the same trend, declining by 49,2 percent month-on-month to 3,98 million units from 7,86 million units in June.
Despite the monthly decline, July activity remained significantly higher than the 1 861 units traded in January, pointing to a substantial increase in investor participation since the beginning of the year.
The number of transactions remained elevated, with 374 REIT trades recorded during the month compared with just 14 in January.
Importantly, the increase in participation over the year has been accompanied by growth in the value of listed property.
REIT market capitalisation on the VFEX rose by 4,2 percent month-on-month to US$125,5 million in July, from US$120,4 million in June, suggesting that the decline in turnover and volumes did not translate into a broad-based erosion of valuations.
Analysts say the performance highlights the growing importance of the United States dollar-denominated exchange in developing Zimbabwe’s listed property market, particularly as investors seek assets capable of generating hard-currency income.
The VFEX REIT segment has become more diversified following the listing of Eagle REIT, the first REIT on the exchange, and the subsequent introduction of Pfuma REIT in February this year.
Eagle REIT has continued to expand its property portfolio, with growth in revenue supporting its investment proposition.
In July, its units gained 9,25 percent, placing it among the stronger performers on the VFEX.
Pfuma REIT, meanwhile, has moved quickly to establish itself as a dividend-paying investment vehicle. It declared an interim dividend of US$446 719.
This highlighted its ability to generate and distribute US dollar-denominated income to investors. Pfuma’s units gained 0,67 percent in July, adding to evidence that listed property is becoming a more visible component of the VFEX market. On the ZSE, activity moved in the opposite direction, with REIT turnover increasing by 19,3 percent to ZiG60,1 million in July from ZiG50,4 million in June.
Trading volumes rose by 17,8 percent to 54,7 million units, while the number of transactions remained broadly stable at 792.
July turnover was more than three times the ZiG17,2 million recorded in January, while volumes were more than six times the 8,9 million units traded at the beginning of the year.
Much of the activity was driven by Tigere
REIT, which has emerged as the dominant trading counter in Zimbabwe’s listed property segment.
Tigere traded 54,71 million units in July, making it one of the most actively traded securities on the ZSE and accounting for the overwhelming majority of REIT volumes during the month.
Its traded value stood at about ZiG60,1 million, underscoring the extent to which investor activity in Tigere continues to shape the performance of the wider ZSE REIT segment.
The increase in trading activity was not matched by growth in market capitalisation.
ZSE’s REIT market capitalisation declined marginally by 0,4 percent in July to ZiG2,76 billion, remaining significantly below the ZiG5,18 billion recorded in January.
Analysts contend that the divergence between trading activity and market capitalisation is significant because it demonstrates that higher liquidity does not automatically translate into higher valuations.
The trend highlights the different dynamics affecting Zimbabwe’s two listed property markets, with VFEX providing investors with a US dollar-denominated avenue, while the ZSE continues to operate primarily in the local currency environment.
REITs are collective investment schemes that pool capital from investors to acquire and manage income-generating property assets, including shopping centres, offices, industrial parks and mixed-use developments.
The structure allows investors to participate in the property market without having to purchase or manage physical buildings themselves.
Returns can be generated through distributions from rental and other property income, as well as potential capital appreciation in the value of the units.
Zimbabwe introduced REITs as part of broader efforts to deepen the capital market and widen investment opportunities beyond conventional equities and fixed-income instruments.
Economist Mr Walter Mapfumo said the increase in trading volumes was an encouraging development for Zimbabwe’s relatively young REIT market, indicating growing recognition of listed property as a viable investment class.
“The increase in trading volumes was an encouraging development for Zimbabwe’s relatively young REIT market,” Mr Mapfumo said.
The continued development of the sector comes as Zimbabwe seeks to deepen its property investment market and attract more institutional capital into real estate.
The broader property market will come under the spotlight at the sixth annual ZimReal Property Investment Forum, scheduled for August 26.
The forum is expected to examine Zimbabwe’s evolving property investment landscape, including the growing role of REITs, institutional capital, pension funds and hospitality investment.
ZimReal commercial director Mr Murray Anderson said Zimbabwe had witnessed the emergence of a thriving listed property market since 2022, supported by innovations on the ZSE and the investment proposition offered by the US dollar-denominated VFEX.
“Since 2022, a thriving listed property market has emerged in Zimbabwe,” Mr Anderson said, adding that the development was being supported by exchange innovations and the investment proposition offered by VFEX.
Zimbabwe Stock Exchange Holdings chief executive officer Mr Justin Bgoni has previously highlighted REITs as an important product diversification tool capable of attracting long-term capital into the property sector.
