PROPERTY developer Terrace Africa has invested more than US$70 million in projects in Zimbabwe as it sees growth potential in the country's real estate, businessdigest can report.
The company is focused on convenience retail property development projects and operates in Mozambique, Zambia and South Africa, apart from Zimbabwe.
The firm boasts of having completed 18 projects in the Sadc region.
“In Zimbabwe, we recently completed Highland Park Phase 2 and have two retail projects finishing in the coming months – Greenfields Retail Centre at the Showgrounds in Harare and Cardinals Corner- in Chisipite,” Terrace Africa managing director Brett Abrahamse told businessdigest.
“We have also started construction on our ambitious 'Design Quarter Project' opposite Highland Park. Our current management portfolio is approximately US$155 million and we have invested over US$70 million in Zimbabwe over the years.”
He said the firm had seen massive growth in the commercial real estate market in Zimbabwe, driven by improved quality of tenants.
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He added that the real estate ecosystem was evolving rapidly.
“Our business is evolving to deliver on some exciting precinct projects along with our usual retail mandate. We will focus on creating quality social spaces for the public to enjoy with their families and friends,” he noted.
“Our cities and main arteries will change substantially over the coming years, and we are excited to play a key role in defining the future.
“Looking at comparative metrics - Zimbabwe lags behind in terms of new retail, hotel and warehouse development per capita. However, the country is starting to play catch-up.
“Improved investment into the sector through pooled structures and REITs (Real Estate Investment Trusts) will provide the necessary catalyst.”
Abrahamse said property should continue to play a critical role in diversification within pension funds.
“It is important for investment decisions and valuations to be driven by yield metrics,” he said.
“Over the years, property has been used for value preservation rather than income creation. This has distorted many internal investment decisions. Pension funds should look to recycle assets and build their portfolio yield.
“This takes bold action and thankfully, we have started to see a shift. Pension funds should work together to pool funds and create quality assets.”
Where asset yields are low, the property expert said pension funds should exit and invest in well-managed and diversified investments such as REITs.
He said REITs offer amazing benefits for pension funds, including quality yields, consistent dividends and liquidity.