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Tapiwanashe Mangwiro-Senior Business Reporter
ASSET management firm, Terrace Africa, has launched its Real Estate Investment Trust (REIT), Tigere, in Harare on Friday, as the company prepares to list the real estate property-based investment security on the Zimbabwe Stock Exchange (ZSE).
The REIT, to be listed on the ZSE next month, will be the first such security on the market. Tigere REIT will be managed by Tigere Property Fund.
Terrace Africa’s has been on an aggressive expansion of retail properties with two properties completed this year while another is currently under construction. The company is preparing 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. The 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.
The Tigere REIT has two properties, namely Highland Park Mall, which opened its first phase in June this year and has 27 retail shops on a lettable area of over 6 000 square metres. It is anchored by tenants that include Pick n Pay, Puma Energy and Simbisa Brands.
Another Terrace Africa property that 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 US dollar-linked and occupancies are currently reported at 95 percent.
“As Zimbabwe grows, we as a company are positioning ourselves to be at the forefront of retail development,” Mr Abrahamse added.
Insurance and pension funds regulator, Insurance and Pensions Commission (IPEC), says REITs may help solve one puzzle that Zimbabwean pension funds face, which is 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,” IPEC chairperson Grace Muradzikwa said earlier.
“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 the planning or development stage,” Mr 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.
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