THE Tigere Property Fund will acquire the Highland Park phase 2 retail development for US$10,82 million from Modern Touch Investments to strengthen its real estate investment trust (REIT).
The property is situated on Lot 230 of Highlands Estate of Welmoed, held under deed of transfer No. 7750/2022.
According to the fund, there was a request by consumers for an improved food and beverage offering as well as additional convenience stores such as banks and a pharmacy, following the completion of phase 1 in June 2022.
The second phase was developed for the purpose of satisfying this excess demand, with construction beginning in November 2022. It was completed in December 2023.
The Highland Park development is one of two assets currently held under the fund, through its listed Tigere REIT. The other asset is Chinamano Corner, located in the avenues area of Harare.
“On July 22, 2024 the Tigere Property Fund and Modern Touch Investments entered into a purchase agreement in terms of which the Tigere Property Fund shall acquire a 100% interest in Highland Park Phase 2, which is currently held by Modern Touch Investments, to be settled exclusively through the issuance of new Tigere REIT units to be allotted to Modern Touch Investments,” the fund said in a statement on yesterday.
“The proposed acquisition of Highland Park phase 2 from Modern Touch Investments is a related party transaction for the purposes of the ZSE listings requirements because Modern Touch Investments is an associate company to Frontier Real Estate Development (Pvt) Ltd, which is a significant unitholder, holding 39,2% of the voting rights in the Tigere REIT at the time of issuance of this circular.”
The fund said the Highlands Park phase 1 development had a market value of US$10 825 000, as determined by the independent property valuer.
- Property firm lists REIT on ZSE
- Tigere REIT to pay out quarterly forex dividends to shareholders
- Tigere REIT unitholders enjoy 16,08% increase in dividend payout
- Ceteris Paribus: REITs and stocks: which way to go?
Keep Reading
The fund added that it had a total net asset value of target property being purchased of US$11 294 810, inclusive of US$602 350 in cash, less tenant deposits of US$132 540.
The fund said 351 282 000 units would be issued in lieu of the purchase.
“The newly-issued units will represent 32,8% of the post-transaction number of units in issue upon completion of the transaction,” the fund said.
Tigere added that Frontier Real Estate Development (Pvt) Ltd would be precluded from voting at the extraordinary general meeting (EGM) on the resolution regarding the proposed transaction.
Frontier Real Estate Development (Pvt) Limited is a pan-African real estate development company that finances and owns a portfolio of strategically located sites including, retail malls, logistics centres, fuel stations and other commercial properties all currently operating within the Sadc region.
The company is owned by three trusts with beneficial interests, namely Roimba Trust (33,33%), Celsia Trust (33,33%) and Lemnos Trust (33,33%). Directors of Tigere, with common interest in Frontier, include Michael Phillip Craft and Anthony Howard Benatar.
The Tigere REIT was launched by property development and asset managers, Terrace Africa Asset Management (Pvt) Ltd, in November 2022, becoming the first such asset class to be listed on the Zimbabwe Stock Exchange.
“Thirty seven percent of Highland Park phase 2’s income is generated by entities operating under the Simbisa Brands umbrella. Exposure to large listed multinational tenants [FCB, CBZ and Simbisa] provides diversification of risk and stability in rental income for the asset,” the fund said.
