Unlocking Zimbabwe's Property Potential: REITs Take Centre Stage

Strategic Insights -

Zimbabwe's property development is on the cusp of a new era, driven by the growth and adoption of Real Estate Investment Trusts (REITs). As the country's premier property investment conference, ZimReal 2024, prepares to kick off on August 28, industry stakeholders are converging to discuss the immense opportunities and challenges presented by REITs. Christabel Shava, Group Legal Manager for Terrace Africa, highlights the fund's continued appeal among investors, citing limited financing options and the attractive tax exemptions enjoyed by REITs. With two REITs listed on the Zimbabwe Stock Exchange and three more expected to list on the Victoria Falls Stock Exchange by year-end, the sector is poised for significant growth. Tigere Property Fund, Zimbabwe's first listed REIT, is set to transform the face of Harare's Highlands Precinct with its 200,000 square metre mixed-use development.

Key Takeaways:

  • The Tigere Property Fund continues to attract significant demand from both retail and institutional investors, driving the growth of REITs in Zimbabwe.
  • REITs offer a viable source of financing and liquidity for property developers, as well as a capital preservation vehicle for retail and institutional investors, citing limited financing options in the country.
  • The retail sector offers healthy rental yields of between 5-7%, making it an attractive sector for REITs to focus on.
  • Welcome Mavingire, an investment advisor with Intellego Investment Consultants, predicts that the market will see more REITs focusing on hospitality and medical assets, adding a social impact to the REIT development story.
  • Clearer tax incentives and more comprehensive REIT rules are needed to unlock more capital and maximize investor value.
  • Regulators must ensure consistency, proper governance, and a better operational framework for REITs.

Statistics:

  • 2 real estate investment trusts (REITs) are currently listed on the Zimbabwe Stock Exchange.
  • 3 more REITs are expected to list on the Victoria Falls Stock Exchange (VFEX) by year-end.
  • The Tigere Property Fund has concentrated on retail developments, including the 200,000 square metre mixed-use Highlands Precinct.
  • The retail sector offers healthy rental yields of between 5-7%.

Sources:

  • Christabel Shava, Group Legal Manager for Terrace Africa, quoted in:

"ZimReal 2024 preparations underway, REITs to drive property development"

  • Welcome Mavingire, investment advisor with Intellego Investment Consultants, quoted in:

"ZimReal Property Investment Forum promises to be a record-breaker"

  • Zimbabwe Stock Exchange (ZSE) press release:

"Listings on the Zimbabwe Stock Exchange (ZSE) 2024"