Paul Nyakazeya, Group Digital Editor 
REAL Estate Investment Trusts (REITs) will be the major driver of the Zimbabwe Stock Exchange’s (ZSE) growth going forward, the local bourse’s chief executive Justin Bgoni has said.
This is because most Zimbabweans consider property to be the safest form of investment which hedges against inflation and offers better returns, he says.
Justin Bgoni, ZSE CEO
Speaking at the Top Companies Survey 2022 sponsored by financial services giant Old Mutual Zimbabwe last Thursday, Bgoni said despite stock markets having diversified products, investors need a long-term view when investing in markets
“ZSE believes REITs are where the bourse’s growth will come from considering that property is of utmost importance to most Zimbabweans. We are optimistic that we will witness the listing of some of the properties of pension funds on the ZSE going forward,” he said.
A REIT is a company that owns, operates or finances income-producing real estate.
They provide an investment opportunity, like a mutual fund, that makes it possible for investors to benefit from valuable real estate, present the opportunity to access dividend-based income and total returns, and help communities grow, thrive, and revitalise.
“What we have noticed is that some pension funds have liquidity challenges because their property portfolio is quite high, so a REIT helps a lot in terms of that (liquidity challenges). What a pension fund can do is to come and lease that property as a REIT and get liquidity or sell part of it to investors, also on top of that they can allow pension beneficiaries to be shareholders in the building. So that increases the scope of what pension funds can do, those that have a lot of buildings on their portfolios,” said Bgoni.
This comes as property firm Terrace Africa has said it is planning to list a REIT this year after opening its new US$20 million Highland Park Mall in Harare recently,.
Meanwhile, Bgoni said volatility on the stock exchange has lately intensified due to the policy environment.
“During the year, especially the past two or three months, financial and monetary measures announced by the government brought uncertainty to the market. Some of the measures include increases in capital gains, withholding tax and interest rates. Whenever such announcements are made, the market takes time to digest, which at times decrease activity on the market. “We have always maintained that one needs a long-term view when investing in the market.”
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