• Tigere REIT reported a 97% year-on-year increase in rental revenue to with net property income rising 84.7%, while maintaining 100% committed occupancy and zero leverage
• The trust introduced Zimbabwe’s first REIT scrip dividend option and announced plans to acquire five new assets in H2 2026
• Despite strong operational performance and stable NAV per unit, Tigere’s unit price declined 32% over the period, creating a significant discount to its underlying asset value

Harare- Tigere Real Estate Investment Trust has introduced Zimbabwe’s first scrip dividend option for REIT unitholders, allowing them to reinvest their quarterly distributions into additional units rather than receiving cash according to the half year results to 6 months ended 30 June 2026. The move is designed to strengthen the trust’s internal funding capacity as it prepares to execute a five-asset acquisition programme in the second half of 2026. Among the targeted transactions is the acquisition of the Electrosales hardware property in Zvishavane, which has been specifically earmarked for funding through the scrip mechanism in the third quarter.

With zero leverage and strong operating cash flows, Tigere is positioning the scrip dividend as a strategic tool to support yield-accretive growth without increasing debt, while giving unitholders the flexibility to compound their holdings in a trust that maintains 100% committed occupancy.

In terms of financial performance, the REIT reported rental revenue of USD 2.17 million, a 97% increase year-on-year, with net property income growing 84.7% to USD 2.23 million.

The trust maintained 100% committed occupancy and zero leverage during the period, while operational efficiency also improved, with the administrative cost-to-income ratio declining from 19.3% to 14.1%, and the debtors-to-rental-revenue ratio falling from 6.9% to 4.3%.

As a result, the fund declared a quarterly dividend of USD 1,003,210, equivalent to US 0.05449 cents per unit, and simultaneously introduced Zimbabwe's first scrip dividend option for REIT unitholders, allowing distribution recipients to reinvest through the purchase of additional units rather than receiving cash.

However, the unit price fell 32% over the same period, and that divergence is the most analytically instructive data point in Zimbabwe's listed real estate sector.

The 97.0% year-on-year growth in rental revenue to USD 2.17 million requires decomposition before it can be read accurately, because three distinct mechanisms produced it and their relative contributions determine how much of the increase is durable.

The first and largest driver was new asset additions. The inclusion of Greenfields Retail Centre and Zimre Park Drive-Thru, whose completions in Q4 of the prior financial year brought them into the revenue base for the full H1 2026 reporting period, accounted for the majority of the year-on-year step-up.

The second driver was rental reversions and escalations. The fund recorded positive rental reversions of 7% across the portfolio and 5.31% in-force escalations, with the 7% reversion confirming that Tigere's retail tenants are willing to pay more per square metre at renewal than they were paying at their previous lease's start, the most reliable available signal of the underlying commercial strength of the portfolio's retail catchment areas.

The third driver, and the one that most accurately isolated the portfolio's organic performance from asset additions, was the like-for-like revenue growth of 3.6%. On the same properties, in the same period, rental revenue grew 3.6% year-on-year, broadly in line with the USD inflation rate of 3.1% confirmed by the Asset Manager as at 30 June 2026.

The 97% headline will compress as the Greenfields and Zimre Park additions enter the comparative base in H2 2026, and 3.6% like-for-like growth becomes the performance measure that institutional analysts will track going forward.

The administrative cost-to-income decline from 19.3% to 14.1%, a 5.2 percentage point improvement over a single half year was due to fixed administrative and management costs being spread across a materially larger income base, the same fund management fee structure, the same secretarial and accountancy fees, the same asset management infrastructure, applied to revenue that is 97% larger than the prior year's comparable.

The fund attributed the efficiency improvement to greater negotiating leverage with service providers and the capping of fund-level corporate expenses to minimise correlation between asset growth and cost expansion.

Operating expenses to total assets fell from 0.6% to 0.5% across the same period, and against a total asset base of USD 60.51 million the 0.1 percentage point improvement represented approximately USD 60,000 in annual cost efficiency, modest in absolute terms but a directional signal that the trust's cost structure is scaling more slowly than its asset base.

The debtors improvement validated the efficiency. The closing debtors balance was reduced by 49.8% over the past six months, producing a debtors-to-rental-revenue ratio of 4.3% against a benchmark of 5% and a prior period ratio of 6.9%, confirming that the tenant base was  paying more promptly as revenue rises, the credit quality signal that distinguishes genuine occupancy recovery from statistical occupancy whose tenants are present but not current on their obligations.

Tigere's portfolio loan-to-value ratio remained at zero during the period under review. At a total investment property carrying value of USD 58.45 million against total equity of USD 59.57 million and total liabilities of USD 944,144, the trust is entirely equity-funded, carrying no mortgage debt on any of its assets, and generating distributable income from a balance sheet whose interest expense line is zero. The zero-LTV position is simultaneously a financial discipline statement and a strategic expansion option as trust that carries no debt has the full capacity of its investable capital available for asset acquisition without the debt service costs that would otherwise consume distributable income.

The fund's cash and cash equivalents of USD 1.75 million at 30 June 2026, generated from an opening balance of USD 1.055 million through positive operating cash flows, confirms that the trust is generating more cash than it is distributing, the retained operating cash that the scrip dividend mechanism is designed to accumulate for deployment into the H2 2026 acquisition pipeline.

The introduction of a scrip dividend option for Tigere unitholders is, to the knowledge of this analysis, the first scrip alternative offered by any REIT listed on the Zimbabwe Stock Exchange. Its commercial logic in the context of a trust with zero leverage, a live acquisition pipeline, and a quarterly dividend obligation of approximately USD 1 million per quarter is the logic of a management team that has identified more value-accretive uses for the cash it distributes than the dividend channel itself creates.

The quarterly dividend of USD 1,003,210 was declared alongside the scrip option specifically earmarked for the yield-accretive purchase of Electrosales Zvishavane during Q3 2026, with the framing being unusually transparent. Unitholders who elect scrip are directly funding a named acquisition whose yield contribution will increase the distributable income per unit for all remaining unitholders in subsequent periods.

For unitholders whose investment objective is capital growth rather than current income, the scrip election is an efficient mechanism for compounding exposure to a trust whose NAV per unit is stable, without the frictional cost of receiving a cash dividend and reinvesting it at market price. For unitholders who need current income, the default cash dividend remains available without any action required.

The REIT is considering five transactions for H2 2026, Electrosales Zvishavane as a third-party acquisition, Design Quarter and Parkade, Cardinals Corner, Kadoma Retail Centre Phase 1, and Gweru Retail Centre Phase 1. Five transactions across Zvishavane, Kadoma, Gweru, and two Harare-based projects would expand the trust's portfolio into Midlands province, geographic diversification that meaningfully reduces Tigere's current Harare-centric concentration and provides exposure to provincial retail demand that Zimbabwe's mining income cycle, agricultural recovery, and diaspora remittance flows are activating outside the capital.

The investment property balance at 30 June 2026 stood at USD 58.45 million, and the addition of five retail assets would materially increase the total asset base, produce another step-up in rental revenue in H2 2026 and FY2027 comparatives, and further dilute the fixed cost structure whose reduction to 14.1% of income H1 2026 has already confirmed.

Committed occupancy of 100%, maintained even during the redevelopment-led physical vacancies at Highland Park Phase 1 whose works are ongoing, confirmed that the pipeline assets have pre-leased demand whose tenants are ready to trade, with physical occupancy at 97% against committed occupancy at 100% being the operational position of a trust that leases before it completes.

NAV per unit increased by 0.1% to US 3.24 cents, with the investment property's fair value carried at USD 58.45 million, an increase of USD 39,947 from USD 58.41 million at 31 December 2025. The near-flat NAV growth despite 97% revenue expansion and 84.7% NPI growth reflected the investment property's fair value stability across the period rather than any impairment, and the absence of acquisitions during the period means there has been no asset repricing event that would change the NAV materially.

FFO per unit grew 13% to US 0.11 cents, DPU grew 14.5%, and distributable income per unit grew 13.3%, translating the portfolio's cash-generating improvement into actual distributions in unitholder accounts and confirming that the NAV stability and market price decline were not connected to any deterioration in the trust's income-generating or distribution capability. Unit holders' equity stood at USD 59.57 million at 30 June 2026.

However, Tigere's unit price on the ZSE declined approximately 32% from its H1 2026 opening level, implying the market is pricing units at a significant discount to the NAV whose movements the financial statements document as broadly stable.

Four milestones will determine whether H2 2026 confirms or extends the H1 momentum. The completion of any interim funding facility for the acquisition pipeline will confirm whether the scrip mechanism alone is sufficient to fund five transactions or whether external capital is required, while the commissioning of Greenfields Retail Centre's currently vacant space, whose committed tenants are expected to trade in H2 2026, would convert 3% physical vacancy to 0% and add the rental income whose absence has held the H1 like-for-like metric below the committed occupancy level.

On the other hand, the Electrosales Zvishavane acquisition, specifically earmarked for Q3 2026 and the clearest confirmed transaction in the H2 pipeline, will provide the first evidence that the scrip mechanism is functioning as designed as an acquisition funding tool, while the NAV per unit at 31 December 2026, incorporating the fair value of whatever H2 acquisitions are completed, will determine whether the gap between the trust's market price and its asset value narrows, widens, or holds at the current discount whose origin the operating results alone cannot explain.

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