The real-estate sector in Zimbabwe seemed to have failed to find ground despite a wave of possible recovery in late 2021. The sector was heavily hit by the Covid-19 pandemic in 2020 to early 2021 as occupancy levels declined to a record low, globally, following the introduction of remote-working which left commercial properties vacant. The pandemic also weighed on returns as incomes were subdued by the economic-activities-halt which led to low productivity and a recession in some parts of the world. Tourism sector was also put on hold for a longer duration during the pandemic era, and this led to almost zero occupancy for tourism properties including hotels.
After a long hour of darkness, Terrace Africa’s Tigere Real Estate Investment Trust (TREIT), introduced on the Zimbabwe Stock Exchange (ZSE) in November 2022, has hit a bull’s eye after declaring USD 152,577 (being 0.021 United States cents per unit) as well as an additional ZWL 75,816,772 (being 10.54 Zimbabwe cents per unit) in respect of the period ended December 31, 2022. Since its launch, TREIT has delivered steady and consistent performance reports and currently has a market capitalization of over $36.4 billion as of February 2023.
TREIT has also proven to be a reliable investment due to its diversified portfolio of commercial and residential properties, offering investors long-term capital appreciation and income. At the time when they planned to go to market, Tigere had about 719 323 000 units available for sale at a planned $28 ZWL per unit. The share price has experienced appreciation of 102% in less than a quarter, which is mind-blowing even after adjusting for 31.2% currency depreciation for the period under review.
Historically, the ZSE-listed property sector has been the least performing sector, operating on consecutive loss margins with two players: Mashonaland Holdings (MASH) and First Mutual Properties (FMP). Dominated by First Mutual Properties in terms of its sharp upward share price movement, the industry has been operating below the breakeven point.
Terrace Africa investment trust has made it clear in its mandate to dominate the sector after its maiden declaration and the 2022 property dominance after completion of US$20 million Highland Park Mall in Harare and the Chinamano corner complexes shown below.
According to Brett Abrahamse, a representative of Terrance Africa Asset Management, the REIT performance since listing has yielded large returns on investments. This has emerged highly after the festive season saw the complex accumulating hospitality outlets in a short
“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% occupancy levels within Q1 of 2023. The key characteristic of a REIT distributing regular income is now a reality in Zimbabwe” he said
Looking into the 20223-year end, Tigere is set to restore the legacy of the property sector in the country due to its investment affordability. The rental cost is constantly increasing, thus correlating with the property fund income. The Zimbabwean infrastructure legacy can find its way back to pre-covid statuses.
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