• Eagle REIT’s asset base rose 15.2% to US$45.4 million, with development inventory increasing to US$9.1 million
• Rental income was US$99,584 against US$821,607 from residential stand sales
• Mazowe Mall and Eagle Heights are moving towards income generation as the Fund manages a US$9.02 million convertible debenture balance and US$1.95 million construction loan

Harare  - Eagle Real Estate Investment Trust,  Zimbabwe's first dollar listed reit, has  increased its asset base by 15.2% to US$45.4 million in the six months to June 2026 as capital continued to move into its development pipeline. Development inventory rose from US$1.8 million at December 2025 to US$9.1 million by June, with much of the increase coming from expenditure on the short stay apartments at Eagle Heights in Victoria Falls.

Eagle’s strategy is built around raising capital, developing properties in selected growth nodes, completing and de-risking those projects and progressively creating an income producing portfolio. The first half of 2026 remained centred on that process, with Eagle Heights under construction and Mazowe Mall moving into operations.

The financial results place the Fund at a point where the development programme has begun to produce operating assets, while a substantial portion of the capital committed to the portfolio remains tied up in projects that are still being completed. Investment property stood at US$31.56 million at June, while net asset value increased 12.5% to US$33.93 million from US$30.17 million at December.

Revenue of US$921,191 during the period came predominantly from residential stand sales, which contributed US$821,607, while rental income contributed US$99,584. Profit after tax reached US$935,838 after the Fund recognised a US$775,701 fair value gain on investment property.

The composition of revenue places the development cycle directly in the financial results. Stand sales provide cash and earnings from the disposal of development assets, while rental income represents the recurring revenue stream that Eagle is seeking to build as completed properties become occupied and operational.

Mazowe Mall is the first major asset moving through that transition. Approximately 94% of its lettable space had been contracted by 30 June, while about 74% was operational, with the remaining gap largely associated with tenant fit outs and regulatory approvals.

SPAR and Simbisa Brands had already commenced operations at the mall, while Eagle was targeting full occupancy by 31 December 2026. As additional tenants begin operating and turnover based rentals contribute, the mall will provide a larger recurring income base against which the Fund's development strategy can be measured.

Eagle Heights carries the larger development programme. Construction of the short stay apartments began in February 2026 and reached 43% completion by June against a 40% target, with three blocks of 29 apartments each under construction and the first block targeted for completion in December.

The hospital adds another stage to the development pipeline. Construction began in May and had reached 8% completion by the end of June, with the facility scheduled to open to the public in August 2027, while Novotel Victoria Falls remains dependent on financial close before construction can begin.

The capital already deployed into the pipeline is visible on the balance sheet. Investment property received US$7.36 million of additions during the first half, while development inventory included US$6.23 million of work in progress on apartments, US$1.65 million of land for apartments and other construction related materials.

Cash generation remains some distance behind the pace of development expenditure. Eagle recorded a US$4.88 million net cash outflow from operating activities and a further US$2.24 million outflow from investing activities, reducing cash and cash equivalents from US$3.95 million at December to US$1.37 million at June.

The operating cash deficit was driven heavily by the development cycle. Inventory absorbed US$3.89 million during the period and trade and other receivables absorbed another US$1.01 million, leaving operating profit before working capital movements at US$209,510 before the working capital investment pushed operating cash flow into deficit.

The funding structure carried much of the investment requirement. Unit holders contributed US$1.68 million during the period, while Eagle issued US$2.73 million of convertible debentures and increased short term financing by US$77,769, producing US$4.33 million of net financing cash inflows.

Convertible debentures stood at US$9.02 million at June, comprising US$6.95 million classified as a financial liability and US$2.07 million recorded within equity. The instruments carry an 8% interest rate and are redeemable after three years from issuance or earlier at the election of the holder.

Eagle also had a US$1.95 million construction loan from FBC Crown Bank. The facility carries an annual interest rate of 15%, has a five year repayment period and requires principal payments from 2027, with interest capitalised into construction costs.

The timing of those obligations will increasingly run alongside the completion of the development programme. Mazowe is moving towards full operations, Eagle Heights is moving through construction and the hospital remains at an early stage, leaving the Fund with several projects at different points of the capital to income cycle.

The fair value gain also needs to be separated from the cash economics of the portfolio. Eagle's US$935,838 profit before tax included the US$775,701 investment property fair value gain, while the cash flow statement removed that non cash movement before arriving at operating profit of

The balance sheet therefore carries a growing stock of property and development assets while the income statement is still drawing a significant portion of its revenue from development activity. Rental income will become increasingly important as completed properties move into operation and begin contributing to the Fund on a recurring basis.

The Fund's own execution priorities provide the milestones against which this transition can be tracked. Eagle is targeting full occupancy at Mazowe by the end of 2026, completion of the first Eagle Heights apartment block in December, continued hospital construction and further capital raising to support the development pipeline.

The development model therefore enters a more demanding phase. Capital has already expanded the asset base to US$45.4 million, while the next financial outcome depends on completed developments becoming occupied and operational, rental income increasing and operating cash generation gaining enough scale to support further development and the Fund's financing obligations.

For Eagle, the measurable progression is now clear, development expenditure has to become completed property, completed property has to become operating assets, and operating assets have to produce recurring income and cash. Mazowe provides the first live test of that conversion, while Eagle Heights and the hospital determine how much additional capital must be deployed before the broader portfolio can contribute to the income base.

The first half has expanded Eagle's balance sheet and advanced several projects materially. The second half will provide more evidence on how efficiently the Fund can convert that enlarged development base into recurring income, stronger operating cash flow and a portfolio capable of supporting its next stage of growth.

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