TIGERE Real Estate Investment Trust (Tigere REIT) will list on the Zimbabwe Stock Exchange (ZSE) today after the initial offer put out last month attracted “tremendous” support from investors.
The Tigere REIT offer, announced on October 28, 2022 and closed on November 25, 2022, received 243 647 792 subscriptions out of 255 323 000 units on offer, about 95, 427%.
“The Tigere REIT units shall be listed on Wednesday November 30, 2022 and will commence trading on the Zimbabwe Stock Exchange on Thursday December 1, 2022. The REIT manager would like to thank the investing public for its tremendous support of the Tigere REIT IPO and we are excited to share in this profitable journey with you,” Tigere REIT management company, Terrace Africa Asset Management, said in a statement.
The Tigere REIT, which will be listed on the local bourse under the symbol TIGZ, will provide an opportunity for investors to own a stake in a high quality commercial property through a highly regulated financial structure.
Terrace Africa managing director Brett Abrahamse recently revealed in an interview with the Zimbabwe Independent that Tigere REIT, with a net asset value of US$22,2 million, will pay quarterly dividends in foreign currency.
Currently, the assets include Highland Park as well as Chinamano Corner and the plan, according to Abrahamse, is to at least double the number of properties in the next two years.
Tigere REIT is majority owned by Frontier Real Estate Development which has in the past raised capital for property assets worth US$120 million.
The underlying portfolio's rental income and the sale of portfolio assets contributed to the dividend income, according to Tigere REIT’s sponsoring broker MMC Capital.
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In Zimbabwe, REITs must distribute to unit holders at least 80% of their annual distributable revenue. As a result, they make it possible to generate steady passive income.
Abrahamse said Mutare was a key area in which the firm was seeking to invest in owing to the trade route with Mozambique.
“We are a long-term property fund. We are not here for guys who are trading on a daily basis in and out of ZWL property. ZSE provides an exchange for people to buy the income earned on these properties.
“That share price that goes up and down should be irrelevant. It is about the yield and rental income being generated out of these shops and that is what we are going to pass on. The actual stock and stock price listed on the ZSE should not bother long-term investors. We will be paying quarterly dividends,” he said.
He added that despite the Victoria Falls Stock Exchange trading in foreign currency, they were not considering listing on that bourse in the foreseeable future.
MMC Capital said the fund had been seeded with two properties under Terrace Africa, namely, Highland Park Phase One and Chinamano Corner, both in Harare.
Highland Park, a mega shopping centre under planning, has 27 retail shops including a fuel station with a gross lettable area of approximately 6 704sqm with 221 parking spaces.
According to the Tigere REIT prospectus, the retail centre is located on 2,4 hectares of land and has a mall built for future expansion and features a parking ratio of over five bays per 100sqm of retail gross leasable area.
Chinamano Corner, in Harare’s central business district, is a modern convenience retail development featuring 13 retail shops, including a fuel station.
In a forecast income statement of the fund, Terrace Africa expects profits of US$1,53 million, US$1,31 million and US$1,37 million within the first, second and third yearsof operation, respectively, for the fund.
Meanwhile, operating expenses over the same period are expected to be US$388 212, US$392 444 and US$400 238, respectively.
Annual revenue over the next three years is expected to be at US$1,94 million, US$1,73 million and US$1,8 million.
