- It has started revitalising Chester House in Harare and Pioneer House in Bulawayo
- Temporary occupancy and yield declined due to tenant evictions, termination of non-performing leases
- PAT soared by 81%, while average occupancy closed at 40%
Harare- In a strategic bid to combat the exodus of companies from central business districts (CBDs), Revitus Property Fund has doubled down on its mission to revitalize aging CBD properties and breathe new life into the urban landscape.
The fund's two flagship projects, the refurbishment of Chester House in Harare and the upcoming renovations of Pioneer House in Bulawayo, are poised to transform the commercial and residential landscape, even as the fund navigates the challenges of temporary revenue declines.
Funds raised from the fund's Initial Public Offering (IPO) were largely deployed towards payments to service providers for the revitalization initiatives, while the balance was invested in listed equities as a capital preservation strategy as the fund awaited deployment towards actual construction activities.
Revitus Property Fund is a real estate investment trust (REIT) that focuses on acquiring and managing commercial real estate properties. REITs are companies that own and operate income-producing real estate.
The Fund invests in a diversified portfolio of commercial properties such as office buildings, retail centres, industrial facilities, and multi-family residential complexes. The fund aims to generate stable income for its investors through the collection of rents and the potential appreciation of the underlying real estate assets.
As a REIT, Revitus is expected to distribute at least 80% of its taxable income to shareholders in the form of dividends. This structure provides investors with exposure to the commercial real estate market while potentially offering higher dividend yields compared to investing directly in individual properties.
During the 3 months to March 2024, which is the period under reveal, In the trading update the Fund revealed a profit after tax of US$102,636, up 81% from the comparative period and above budget.
However, the average occupancy and yield ratios were weakened by the eviction of tenants in preparation for renovations, the termination of non-performing leases, and economic challenges induced by inflationary pressures and exchange rate volatility, which put pressure on tenants' ability to meet their obligations, resulting in low collection rates in Q1.
Nevertheless, these metrics are expected to improve as the buildings are revitalized and quality tenants are on-boarded in the short to medium term.
The fund anticipates economic stability driven by the more stable structured currency, the ZiG, which is expected to enhance business performance for occupants and uplift collection rates.
In line with its commitment to pay quarterly distributions, Revitus Property Fund has declared a maiden interim dividend for the quarter ended March 31, 2024 of $45,804, which equates to 0.012 United States cents per unit.
Equity Axis News
