Tigere lauds prevailing stability, bemoans low CBD office space uptake

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LISTED Real Estate Investment Trust (REIT), TIGERE Property Fund has hailed the relative macro-economic stability in the last quarter however saying it was on the back of dwindling office space uptake in the Central Business District (CBD).

In a trading update for the quarter ended September 30, 2023, the REIT said economic conditions during the period were on the stable side.

“Macroeconomic stability prevailed during the quarter ended 30 September 2023. ZWL depreciation and price growth moderated significantly from July 2023 up to the end of September 2023.

“On the back of this perceived stability, the authorities have revised the 2023 national output (GDP) growth projections to 5,3%, up from the initial projection of 3,8%,” said TIGERE.

However, the REIT said despite the property market continuing on a growth trajectory, with several exciting developments ongoing across the country, in Harare, demand for suburban office space continues to soar.

“Many corporates are migrating from the CBD owing to issues such as increased congestion, high parking fees and heavy traffic enforcement. More and more activity is being witnessed in the retail sector as the economy continues to grow and tenants continue to demand good quality leasing options.

“Unfortunately, however, infrastructure spending on key arterial roads and maintenance provides an ongoing challenge for Property developers,” said the REIT.

Speaking on internal performance, the company said both Chinamano Corner and Highland Park Phase 1 maintained their stellar performance for the quarter as both assets are coveted real estate assets and remained fully occupied and showed increased customer footfall.

Due to robust tenant demand, certain unutilised space is being converted to generate additional rentable area.

Marginal growth in rental income is expected due to the creation of additional space. We are pleased to announce that Highland Park Phase 2 shall be opened before the busy Christmas season and should improve turnovers for the existing tenants due to increased activity in the node.

Tigere REIT said it holds a pre-emptive right to acquire Highland Park Phase 2 on completion.

During the period the firm generated US$1,3 million rental income out of which US$ 804 899 total comprehensive income was realized.

Occupancy levels remained 100% with property expense ratio hovering at 18,5%.

“In line with our commitment to pay quarterly distributions, the REIT has declared an interim dividend for the quarter of US$261 740 consisting of US$ 235 225 (being 0.0327 United States cents per unit) and ZW$ 140 525 792 (being 19.5358 Zimbabwe cents per unit). Based on our forecasted net income for the final quarter, we expect sustained growth in distributions to unit holders,” added TIGERE. – NewZim