Zimbabwe Stock Exchange expects more Real Estate Investment Trust listings

ZIMBABWE Stock Exchange (ZSE) is targeting to leverage new investments such as Real Estate Investment Trusts to expand its base following the growing prospects of the sector.

Last week, the National Railways of Zimbabwe Contributory Pension Fund (NRZCPF) launched its REIT Fund (Revitus REIT) which is meant to draw funds from investors for the purpose of renovating their old properties.

The REIT is expected to be listed on ZSE mid-December.

This will be the second REIT to be listed after Tigere, which was listed last year.

Early this year, ZSE launched the REIT Association of Zimbabwe which is targeted at this growing investment.

That saw ZSE revealing that it is expecting to see more REITS listings as the sector is growing in Zimbabwe and beyond.

A REIT is a regulated investment vehicle under the Collective Investment Scheme Act that enables the issuer to pool investors’ funds for the purpose of investing in real estate.
In exchange, the investors receive units in the trust, and as beneficiaries of the trust, share in the profits or income from the real estate assets owned by the trust.

During the launch of Revitus REIT, ZSE chief executive officer Mr Justin Bgoni said: “We are excited about this development as we believe that the growth of the ZSE will come from new products and services such as REITS.”

“The Zimbabwean capital markets has seen a growth of interest in the instrument, and the listing of the Revitus REIT is indeed a welcome development to our market,” he said.

Mr Bgoni said the REITs Association led by Dr Mike Juru offers continuous trainings as part of the efforts to broaden the securities offered to the market and engagements with potential issuers

He also said they have many REITs that want to list on ZSE and are lobbying the Government for tax incentives.

According to Datvest, a CBZ arm which is into asset management, globally, there has been securitisation of real estate assets, however in Africa, REIT is still a developing phenomenon and Zimbabwe is the 7th country to introduce REIT.

Pursuant to this, Datvest said locally it is an investment asset class that remains untapped as the country has one REIT.

Going foward, it said the real estate sector must explore the possibility of unlocking value by financing public infrastructure development through REITs.

“We have seen similar initiatives in the global capital market where ongoing multibillion-dollar infrastructure projects have taken off such as rehabilitation of roads and green energy projects,Datvest managing director Mr Tendai Muzadzi. — -chronicle