Zimbabwe is getting its very first Real Estate Investment Trust (REIT) after the launch of Tigere Property Fund. A REIT allows a company to pool investor funds into real estate investments. Investors then buy units in the trust and share profits from the investments. The Tigere REIT has started out with two new commercial retail assets, Highland Park and Chinamano Corner, which were recently completed by property developer Terrace Africa.
The REIT will be listed on the Zimbabwe Stock Exchange on November 23.
Here, we speak to Brett Abrahamse, 38, of Terrace Africa Asset Management to find out what comes next in terms of his company’s property development.
Hell of a time to be listing on the ZSE, given what it’s like on the market right now?
Sure, property is a long-term game. We’re not here for short-term gains or losses. We know the value of our properties. We know the income it’s creating. People want to share it, and hopefully, they will be in it for the long term. We’re not the guys that watch the share price every day. We’re the guys that make sure we get an income. The reason for listing is to make it as available to the public and institutions as much as possible. The ZSE is the right way to go at the moment in terms of getting the exposure.
You’ve done Highland Park and Chinamano Corner. What other projects are in your pipeline?
We’ve got Phase 2 of Highland Park which is already under construction. It will open around this time next year. We have a site in Ruwa that we are working on, currently in planning stage, that we will start on early next year. We have another site in Harare. It’s an extremely well-located site along Bulawayo road. That is something our team is busy tenanting and leasing at the moment. All of these projects will have the first right of refusal into the REIT. The REIT will have first access to purchase them. We are very excited to share those in the REIT so that everyone who buys into the REIT will be able to share in the income of those future projects.
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In terms of your portfolio mix, are you only focused on retail, like Highland Park? Are you also looking at industrial properties, for instance?
We definitely want to keep it retail focused. However, we have plans for commercial offices and mixed-use components which benefit office and retail. Our portfolio will also be predominantly weighted to retail, but we could go up to 30% in terms of commercial and hospitality.
In Zimbabwe, a lot of people get very suspicious of investments. People have been burnt before. Isn’t this REIT some sort of scam, and two years down the line something goes wrong?
As with any trust, there’s a trustee in charge. The beneficiaries of that trust cannot demand ‘I want an extra $100 000 this month’. The trustee decides. We have these checks and balances. Internationally, America has a US$45 trillion-dollar REIT market. So, that’s US$45 trillion worth of people and institutions that trust this structure. The Zimbabwe structure is even more regulated than that (US) structure; one regulation is that you can’t just throw any properties in, they have to be newly developed. The regulations are extremely tight.
We’re not some stokvel scheme where you put in your money and hope for the best. It’s traded through an internationally recognised exchange, the ZSE, and we’re going to be here a lot longer than two years.
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