Eagle REIT targets VFEX debut by May

Eagle Real Estate Investment Trust (Eagle REIT) is set to list about 137,6 million existing units on the Victoria Falls Stock Exchange (VFEX) next Thursday through a listing by introduction, which will make already held units available for public trading.

According to a pre-listing statement this week, Eagle REIT is strategically focusing on developing, owning, professionally managing and investing in a diverse portfolio of real estate assets within resilient sectors such as tourism, healthcare, residential properties and retail spaces.

The fund’s primary objective is to generate consistent, long-term and risk-adjusted returns for its investors, with all units denominated and traded exclusively in United States dollars on the VFEX.

“Over the last two and a half decades, Zimbabwe has been gripped by episodes of hyperinflation, currency depreciation and changes that led to investors losing value on monetary assets,” says the pre-listing statement released on Tuesday.

“Property proved to be a hedge against inflation as prices generally moved in line with exchange rate movements. With the underlying assets being property, the fund seeks to preserve capital for investors.”

The VFEX listing will provide a platform for investors to engage in secondary market trading of Eagle REIT units at quoted prices, offering liquidity for those seeking to divest.

Managed by Fidelity Life Asset Management Company, the REIT aims to provide investors with a share of potentially lucrative developer profits, estimated at 15 to 25 percent of project costs.

For institutional investors like pension funds, Eagle REIT presents a dual advantage by qualifying as a prescribed asset, aiding in regulatory compliance while offering portfolio diversification and a potential hedge against local currency volatility through its US dollar-denominated VFEX listing.

The fund’s strategy involves targeted investments in promising locations to generate stable rental income, often in foreign currency, and further enhance returns through its own development projects, aiming for greater tax efficiency and improved investor outcomes by building strategically, rather than solely acquiring existing properties.

Eagle REIT is committed to distributing at least 80 percent of its taxable income as dividends, presenting a compelling opportunity for long-term growth and consistent income in Zimbabwe’s evolving market.

Fidelity Life Asset Management serves as the manager, responsible for operational management, while CBZ Bank acts as the trustee, overseeing the fund domiciled and legally formed in Zimbabwe under the regulation of the Securities and Exchange Commission of Zimbabwe (SECZ).

Anchor investors include Fidelity Life Assurance of Zimbabwe Limited and Zimre Holdings Limited.

Governance of the fund includes an advisory board comprising representatives from anchor investors, other investors, and independent experts who will provide oversight alongside the fund manager’s and trustee’s executive and audit committees, as well as the ZHL group investments committee.

Potential investors should consider key factors such as currency risk, liquidity risk, counterparty risk, legal and contractual risk, portfolio vacancy risk, market risk and cost overrun risk, says the statement.

The Eagle REIT’s income will be tax-exempt contingent upon compliance with REIT regulations and continued authorisation by SecZim and registration by Zimra.

Non-compliance would render the fund’s net profits subject to prevailing income tax rates, and capital gains on property sales will be subject to Capital Gains Tax, according to the statement.

As of December 31, 2024, it had total assets valued at US$23,8 million and a net asset value of US$20 million.-herald