TIGERE Property Fund, Zimbabwe’s first real estate investment trust (REIT) to trade on a mainstream exchange, has had a positive start, gaining 80,79 percent since it started trading on the Zimbabwe Stock Exchange (ZSE) on December 1, 2022.
The fund was listed at a price of $28 per unit but traded yesterday at $50,62.
It was the best-performing alternative asset on the exchange during the period. The Old Mutual ZSE Top 10 exchange-traded fund (ETF), had the second-best returns among the alternatives, with gains of 53 percent.
The All-Share Index was ahead of both assets with a gain of 100 percent. This is, however, primarily due to the bourses spike over the past week.
The Tigere fund recently declared its maiden dividend, amounting to US$152 577 and ZWL75,8 million.
According to listing guidelines in Zimbabwe, a REIT should pay at least 80 percent of its distributable income to unit holders.
“We have seen exceptional turnovers from our retail and food-related tenants… performance of the portfolio was in line with expectations, and our assets will reach 100 percent occupancy levels within the first quarter of 2023,” Brett Abrahamse of Terrace Africa Asset Management said in a statement accompanying the dividend announcement.
Sentiment within the market is that the country’s first REIT will help broaden capital markets and improve financial inclusion.
“From a capital markets perspective, it’s a positive development because as the first real estate investment trust it deepens our capital markets,” market analyst Batanai Matsika told The Financial Gazette recently.
“If you look at South Africa for example it’s a very developed market where a lot of properties are developed through REITs.
“So, it’s good for our markets and it’s good for the broader real estate industry in Zimbabwe. From an investor’s perspective, it increases the universe of investable assets. So, on the market, you have access to equities but this one is a different asset because it’s real estate and it’s tradeable,”
“It brings about that liquidity… and it is available on a local exchange, which means from an access point of view, a lot of investors, retail investors can also be included… it also speaks to financial inclusion on the broader capital markets.”
Meanwhile, analysts say the market is unlikely to see the same level of interest for listings this year that it did in 2022 due to its recent slump in trading activity. Other than the Tigere fund, the market last year added four ETFs.