- Revitus REIT expects occupancy and yield ratios to recover in short-term, driven by the refurbishment of Chester House
- The Trust's average collection ratios improved to 79% in Q2 2024, despite liquidity challenges,
- Trust’s actual profit for the first half of the year (HY) exceeded its budgeted profit by 36%
Harare- Revitus REIT is expecting a recovery in occupancy and yield ratios in the short to medium term as refurbishment of Chester House (Harare) is at an advanced stage with final technical approvals for conversion from office use to licensed residential accommodation scheduled to be secured in Q3 2024.
Revitus licensed by SECZ in 2021, comprises five CBD commercial properties aimed at unlocking investor value through capital appreciation and rental growth. The REIT plans to renovate two buildings every two years, starting with Chester House in Harare, followed by Pioneer House in Bulawayo, driving growth and enhancing investor returns.
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.
According the Trust in its latest half-year finacials for the six months to 30 June 2024, appointment of a reputable operator for Chester House is set to be concluded in the 2nd half of 2024 as groundwork for renovation works is also being finalized.
As a result of these renovations, overall occupancy and yield ratios on the properties were suppressed during the first half of the year following evictions of tenants in preparation for commencement of renovation works, as well as termination of non performing leases.
“Performance metrics are expected to improve after renovations as reputable tenants will be on-boarded in the short to medium term,” the Trust said in a statement in its HY financials.
On the upside, the Trust’s average collection ratios improved to 79% in Q2 2024, up from 69% achieved in Q1 as credit control measures continued to be reviewed to enhance performance, albeit liquidity challenges experienced in the country.
The real estate market remains a preferred avenue for long-term value preservation and sustainable earnings. Growth in the informal sector, particularly driven by Small to Medium Enterprises (SMEs), has led to increased demand for affordable working spaces.
Positive growth is anticipated in both the residential and commercial real estate sectors, bolstered by rising interest from international investors, an expanding tourism industry, and government initiatives aimed at promoting affordable housing.
The Trust outperformed its half-year profit budget by 36% from its existing portfolio of buildings awaiting revitalization.
As a result, the Trust declared a quarterly dividend of USD 48,134 for the second quarter (Q2) ended June 30, 2024, translating to 0.0131 United States cents per unit, in line with its commitment to distribute dividends quarterly.
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