• Seef Developments is considering to establish a REIT in hospitality and tourism sector
• The scheme plans to secure US$3 million through private placement
• The REIT will open for private placement on the 26^th of June 2023

Harare- Seef Developments is contemplating the establishment of a Real Estate Investment Trust (REIT), setting its sights on the prospective Zimbabwean Tourism and Hospitality market, with plans to secure US$3 million through a private placement.

In 2019, Zimbabwe’s tourism sector contributed 6.4% to the total GDP and 4% in 2019 when the COVID-19 pandemic took toll in European and Asian countries.  In 2018, tourism contributed US$1.3 billion, 2019 US$1.2 billion and US$360 million in 2020.

The REIT will open for private placement on the 26th of July 2023 while the closing date remains at the discretion of promoters. The REIT targets to raise US$3 million through a private placement by issuing 300 000 units worth US$10 each, with the US dollar as the only currency of issuance. 

The targeted rate of return is 15% per annum and the funds will be used for the acquisition, refurbishment and development of tourism and hospitality assets.

Seef Developments is a real estate development company based in Bahrain that focuses on developing and managing properties in the hospitality, residential, commercial, and retail sectors. The company was established in 1999 and has since then developed a diverse portfolio of properties.

According to an investment teaser by the Company, the objective of the Scheme is to offer members of the public and institutional investors opportunities where they can acquire a participatory interest in the ownership of quality hospitality and tourism assets, as proposed by the Promoter, Manager and Trustee and Key Participants.

“Furthermore, the option of a growing income, security and preservation of the purchasing power of precious capital. In addition, sharing in long-term capital growth resulting from the increase in the value of such attractive assets provides a great motivational case to various investors,” read the investment teaser. 

Seef Developments Hospitality and Property Funds are investment funds managed by Seef Properties, a subsidiary of Seef Developments. These funds allow investors to invest in real estate properties developed and managed by Seef Developments. 

The Hospitality Fund focuses on investing in hospitality properties such as hotels and resorts, while the Property Fund invests in a diversified portfolio of commercial, residential, and retail properties. Investing in these funds can provide investors with exposure to the real estate market and potentially generate income and capital appreciation over time. 

However, as with all investments, there are risks involved, and investors should carefully consider their investment objectives and risk tolerance before investing in these funds. The REIT is Zimbabwe’s first Hospitality and Tourism REIT giving it a first-mover advantage and a unique position to create a foundation for structural changes to Zimbabwe’s Hospitality and Tourism Sector

The new REIT will focus on acquiring and managing a diversified portfolio of tourism and hospitality properties in Zimbabwe, including hotels, resorts, and other related assets. Zimbabwe is a country with significant potential for tourism and hospitality investments, and Seef Developments aims to capitalize on this opportunity by developing a strong presence in the market.

The scheme is regulated by the Securities and Exchange Commission of Zimbabwe and targets to launch on one of the local stock exchanges later, either ZSE or VFEX. The launch of the REIT represents a significant milestone for Seef Developments and highlights the company's commitment to expanding its operations in emerging markets. 

By leveraging its expertise in real estate development and management, Seef Developments aims to create value for its investors while contributing to the development of the tourism and hospitality sector in Zimbabwe.

One of the key merits is that there are several tax rebates and incentives available for investments in the hospitality and tourism sector and the Property Fund stands to benefit from them. Income accruing from REITs is exempt from corporate tax, though subject to several conditions.  

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