Fidelity Life Asset Management is betting on growing demand for hotel space in Victoria Falls to anchor a new real estate investment fund that will soon debut on the Victoria Falls Stock Exchange (VFEX).
The Eagle REIT, which the company manages, is developing a US$42.4 million complex in Victoria Falls that will include a hotel, shops, homes, and a hospital.
The REIT has already raised US$24.5 million from investors, and nearly US$20 million of that has already been put to work. Next up is a public listing on VFEX with over 35 million shares up for grabs.
The Eagle REIT’s flagship project is a 120-room hotel, to be managed by Novotel, the mid-range brand of France’s Accor group. The complex will also have a 36-bed hospital, a shopping centre, and residential properties. The site is 5km from Victoria Falls town along the Bulawayo road.
Why Vic Falls? Fidelity says there’s a clear gap in the market. The town currently has around 1,568 hotel rooms, but the mid-range offerings are said to be “of very poor quality.” With the closure of the once-popular Kingdom Hotel, the shortfall has only worsened. Even if some hotels reopen, Fidelity argues, their dated designs and massive sizes won’t deliver the intimate experience that many travellers now expect.
There is a “concentration of future supply at the higher end levels, and the poor quality in the midscale segment”, says the fund.
The complex will also feature cluster homes — adding to the five similar developments already completed in Victoria Falls over the past six years, a sign of demand such homes in the town.
Meanwhile, in Mazowe, Eagle REIT has wrapped up construction of Mazowe Walk, a US$12.2 million mixed-use complex featuring retail, flats, and a clinic.
“As a greenfield precinct, Mazowe Walk is expected to grow gradually, reaching maturity in about 5 years, beyond which the development would be the driver of societal progress in Mazowe District,” says the fund.
There’s been an early setback: OK Zimbabwe, initially set to be the anchor tenant, has pulled out as part of its financial restructuring. That’s dragged the occupancy rate down from 83% to 45%, but Fidelity says it’s already in talks with new tenants.
Fidelity says there has been too little focus on areas such as Mazowe, which up to this point did not have “a decent shopping centre despite the town’s large catchment area”.
