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Revitus lists on ZSE; five more REITs in the pipeline The Revitus REIT is expected to start trading on the Zimbabwe Stock Exchange on Wednesday following its official listing this morning. It will become the second such instrument on the bourse, with five more in the pipeline. According to the results of the IPO, 18.27% or 22.17 million of the units were taken up by investors, mostly institutional, at $400 per unit while the remaining 81.73% or 99.2 million units were taken up by the underwriter and promoter; the National Railways of Zimbabwe Contributory Pension Fund. The proceeds of the IPO will now be used to fund the renovation and revitalisation of five portfolio properties in order to enhance their income-generating capacity. After the upgrade, investors will be able to derive higher income and have more valuable assets. Revitus was the first REIT to be licenced in the country in 2021, however, the time taken for REIT legislation to be drafted and then promulgated, and lack of clarity on tax structures and accounting, even after promulgation, delayed its listing. It’s however the first REIT owned by a pension fund. ZSE chairman Caroline Sandura said five more REITs will be listed in the coming year, including Zimre’s Eagle REIT and an Old Mutual instrument. NRZCPF has seeded five properties into the Fund, which will be refurbished and repurposed in phases. Phase 1 will be targeted at refurbishing Chester House while the remaining properties – Electra House, Atlas House, Pioneer House and Africa House will be done over two phases. Chester House along Speke Ave in Harare and Pioneer House in Bulawayo will be repurposed from office use to licenced residential, which can include long-stay apartments, lodges and hotels. The proposed facility will have apartments and other supporting facilities like restaurant, shared work-space and entertainment lounge (bar). According to IPEC Commissioner Grace Muradzikwa, the operating environment which has been characterised by cycles of volatility has seen an increase in property investments by pension funds as a measure of preserving value. As of September 30, 2023, investment property constituted over 55% of total industry assets from 47% in the same period last year. For the NRZCPF, investment properties make up 56% of total assets. While properties preserve value, the gains on such are largely unrealised due to the illiquid nature of the asset class. “As a result, mature pension funds such as NRZCF fail to timeously pass on these gains to their pensioners as there is no sufficient liquidity. But with this REIT, liquidity will be unlocked and be passed on to its members.” Revitus REIT will act as a catalyst for the re-generation of Central Business Districts (CBDs) of major urban areas that are on the verge of urban decay. Finance Minister Mthuli Ncube said that while some companies are migrating from the CBD to low density suburbs, the migration presents an opportunity to reconfigure the buildings to suit current consumer patterns and requirements, including catering for the needs of small and medium scale enterprises who are still hungry for CBD space. “Government fully supports such initiatives as they are part of urban re-generation and modernisation of our economy. To demonstrate our support, my ministry granted prescribed asset status to the Revitus REIT and this should enhance its attractiveness not only to the institutional investor who wishes to comply with regulatory requirements but also any investor looking for safe, stable investments. Securities and Exchange Commission of Zimbabwe CEO Anymore Taruvinga said there has been steady growth in investment schemes in the past year. “We have licenced 20 new collective investment schemes as of the end of the third quarter 2023. The total number of collective investment schemes now stands at 81 and the funds under management are $238 billion plus an additional of US$21.5 million. Source: Financial Express |
