The Tigere Property Fund will become Zimbabwe’s first listed Real Estate Investment Trust (REIT) after launching its prospectus Friday ahead of its listing on the Zimbabwe Stock Exchange.
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 Tigere REIT has been seeded with two new commercial retail assets, Highland Park and Chinamano Corner, which were recently completed by property developer Terrace Africa.
From Friday, investors will be able to buy Tigere units. A total of 255,323,000 units in the Tigere REIT will be on offer at Z$28 per unit. At the end of the offer, Tigere hopes to have issued all the 719,323,000 units available. Listing of the units is expected on November 23.
“Our seed assets are already performing exceptionally well, with income and occupancy levels trading ahead of initial expectations,” says Brett Abrahamse of Terrace Africa Asset Management.
The Tigere REIT was approved by the Securities and Exchange Commission in July 2022, and its promoters say it will enhance the current property investment market through improved transparency, liquidity and compulsory dividend pay-outs.
Highland Park and Chinamano Corner have a combined total of 41 retail tenants. Over 75% of income earned from tenants by the Tigere REIT is USD-linked and occupancies are currently reported at 95%.
“We are very excited to be the first to list a REIT in Zimbabwe. We strongly believe this important development will boost the local property market, improve governance and give investors an opportunity to invest transparently in the commercial property sector,” said Michael Craft, Director of Frontier Real Estate, the REIT Promoter.
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. Justin Bgoni, ZSE CEO, hopes Tigere will be the first of more REITS to list on the exchange.
“We look forward to seeing more REITs list in the near future and congratulate the Tigere team on their achievement and unlocking more value for investors and facilitating economic growth in the country,” said Justin Bgoni, CEO, Zimbabwe Stock Exchange.
Terrace Africa, which is also the developer of Village Walk in Borrowdale and the Marondera Mall, said it had a pipeline of more developments across the country.
“Unit holders will also have access to our extensive and innovative US$50 million property development pipeline, which comprises of exciting commercial projects that are currently in planning or development stage,” Abrahamse says.