Tigere REIT excites market

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THE country’s first Real Estate Investment Trust (REIT), the Tigere Property Fund, will help broaden capital markets and improve financial inclusion, analysts say.
This comes after asset management firm, Terrace Africa, launched the Tigere Real Estate Investment Trust, also known as the Tigere Property Fund, last week in preparation for listing on the Zimbabwe Stock Exchange (ZSE) this month.
It also comes amid a concerted push by ZSE for REIT listings driven by expectations that they will become major drivers of the market’s growth going forward.

“From a capital markets perspective, it’s positive because as the first real estate investment trust it deepens our capital markets. 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,” market analyst Batanai Matsika told The Financial Gazette this week.
“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. So it also speaks to financial inclusion on the broader capital markets.”
He however cautioned that its performance would be subject to the broader macro-economic environment.
“Their theme is consumer oriented in the sense that they are looking at the retail sector and the consumer space is quite defensive, so the broader macro economic factors will determine whether some of these projects can actually be attractive but as it stands, I think it’s actually a very good thing,” Matsika said.
The Tigere REIT has two properties, namely Highland Park Mall and Chinamano Corner.
The Highland Park Mall has 27 retail shops on a lettable area of over 6 704 square metres and comprises 27 retail tenants including a fuel station.
The Chinamano Corner tenant mix consists of 13 shops which include a pharmacy, convenience retail, florist and multiple food tenants. A Puma fuel station acts as a key attraction to the site, allowing for a steady stream of clientele throughout the day.
Finance minister Mthuli Ncube has proposed corporate tax exemptions for REITs subject to conditions to incentivise participation in the alternative instruments.
As one of the conditions, a REIT should receive at least 80 percent of its gross income from real estate, and distribute a minimum of 80 percent of its taxable income in the form of shareholder dividends each year to qualify for the exemptions.
An investment manager with a top stockbroking firm said REIT listings will help close the infrastructure development gap between Zimbabwe and regional economies such as South Africa.
The ZSE anticipates more REIT listings.
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