• Old Mutual is preparing a US$46.2 million Development REIT to finance the first phase of a US$150 million commercial property pipeline spanning Harare and Victoria Falls
• The vehicle positions the Victoria Falls Stock Exchange as a source of long term development finance rather than only a secondary trading platform
•  Prescribed asset status would open the fund to pension funds and insurers, creating a new institutional funding channel for large scale commercial property development

Harare - Old Mutual Zimbabwe is preparing a US$46.2 million Development Real Estate Investment Trust which mobilises institutional capital through the Victoria Falls Stock Exchange rather than conventional bank lending. The fund forms the first phase of a US$150 million development pipeline across Harare and Victoria Falls.

This arises from a structural mismatch in the local property market, where commercial developments require patient capital over several years and domestic bank funding remains concentrated in shorter dated facilities that do not align with construction cycles. A listed Development REIT closes that gap by allowing pension funds, insurers, asset managers and corporates to fund property development directly through a tradable United States dollar security.

Investor teaser material prepared by property consultant Kura Chihota targets subscriptions for the third quarter of 2026 ahead of a tentative VFEX listing in the fourth quarter. The fund is expected to operate under prescribed asset status with a three year development horizon. Old Mutual has not released a formal prospectus and the final fundraising amount, fee structure, investment terms, timetable and projected distributions remain subject to regulatory filings and formal disclosure.

The portfolio combines development exposure with existing income generating assets, which strengthens cash flow resilience during construction by introducing recurring rental income alongside new project delivery. The Grange Lifestyle Estate anchors the portfolio. The 47 hectare mixed use development has secured subdivision approvals and development permits, which removes major regulatory execution risk ahead of construction. Phase One carries an estimated value of approximately US$11 million and delivers around 8,000 square metres of retail, restaurants, office accommodation, medical facilities and premium residential units. Civil infrastructure works are already underway.

The Borrowdale mixed use precinct comprises approximately 15,000 square metres of Grade A office accommodation and about 2,800 square metres of convenience retail in one of Harare's established commercial districts. Future phases add residential apartments, additional retail, a hotel and a conference centre. The existing operational assets generate recurring United States dollar rental income during construction of the new phases, which funds the broader development programme internally.

The Victoria Falls component adds a proposed 130 room internationally branded hotel near Victoria Falls National Park, built in partnership with an international hospitality operator and including conference facilities, restaurants and leisure amenities. Financial close is targeted ahead of an estimated twelve month construction period. Investor documentation projects a rental yield of 7.1 percent, a figure that depends on occupancy levels, tourism demand and operating conditions once the hotel opens.

The transaction extends Old Mutual's broader capital markets positioning. The group announced the migration of its suspended secondary listing from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange earlier this month, restoring trading access for local shareholders. The Development REIT builds on that move by using the VFEX to originate new investment capital rather than only host secondary trading, which strengthens the exchange's position as Zimbabwe's principal marketplace for United States dollar denominated instruments.

Construction delays, cost escalation, slower leasing and weaker rental growth carry direct downside for the projected returns. The Victoria Falls asset in particular ties performance to regional tourism and conference demand, both sensitive to travel patterns and broader economic conditions. The projected 7.1 percent rental yield and the roughly 8 percent overall return target remain indicative figures pending the final prospectus.

Eagle REIT and Pfuma REIT have already demonstrated investor appetite for listed property products on the VFEX. Old Mutual's advantage sits in the scale of its pipeline, institutional sponsorship and the combination of stabilised income assets with new development inside one vehicle. A successful raise tests whether prescribed asset status can actually pull pension and insurance capital into commercial property at scale, and a strong uptake here gives developers in logistics, healthcare and hospitality a template to follow with their own listed vehicles.

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