ZSE upbeat about first REIT listing

The Zimbabwe Stock Exchange (ZSE) says it is ready to list Real Estate Investment Trusts (REITs) on its platform, with interest already high from issuers.

To date, two, REITs have been licensed and are at different stages of the listing process.

ZSE head, depository services, Tinashe Mapara told stakeholders at a recently held ZimReal Investment Forum that the bourse was upbeat about having its first REIT listing before the end of this year.

“We have licensed two REITS and the pipeline is good. As ZSE, we are ready to list on the platform and we are positive. We will have our first listing before year-end,” he said.

He, however, said while the REITs market generated interest from stakeholders, their coming on board was also determined by the obtaining macro-economic environment.

“But we cannot control the environment. Issuers will also want to list when the time is right,” he said.

Intellego Investment Consultants managing consultant Welcome Mavingire concurred.

“You do not want to list on a depressed market,” he said, adding the market could not rule out possibilities of teething challenges, with the REITs being a new investment offering.

He said plans were at an advanced stage for the listing of the Tigere REIT, which is expected by year-end.

Tigere REIT will operate under the Collective Investment Schemes Act [Chapter 24:19], as recently amended, and investors in the fund can expect income tax benefits, cash flows through dividends (a legislated minimum 80 percent distribution of net income paid to unit holders), and a well-managed property portfolio with quality US dollar-linked rental income.

National Railways of Zimbabwe Pension Fund chief finance officer Chipo Hlabangana said the REITs remained a fair investment option, especially for pension funds.

She added this would be an opportunity to raise funds for the rejuvenation of buildings, especially in the central business district, which have become dilapidated and are an eyesore, with some businesses moving to better structures.

“Properties remain a store of value. With REITs, it’s a fair investment, and dividends
are ensured because of rental incomes,” she said.

REIT is a regulated investment vehicle 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 profits from the real estate assets.

ZSE announced the REITs listings in 2020, but listings have been taking longer to debut on the bourse, with issuers demanding more investor-friendly regulations.

Stakeholders have also called on the establishment of a REITs association that should help catalyse learning and knowledge transfer. – Sunday Mail

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