THE soon-to-be-listed Tigere Property Fund Real Estate Investment Trust (Tigere REIT) with a net asset value (NAV) of US$22,2 million will make quarterly foreign currency dividend payments to investors, businessdigest can reveal.
Tigere REIT is majority owned by Frontier Real Estate Development (Fred) which has in the past raised capital for property assets worth US$120 million. The Tigere REIT is expected to be listed on the Zimbabwe Stock Exchange (ZSE) on November 23.
Terrace Africa Asset management which shares the same director with Fred recently launched what will be Zimbabwe’s first listed REIT to offer a diversified investment vehicle on the main bourse. The launch was also made to help raise long-term capital for Fred.
The common director is Terrace Africa managing director Brett Abrahamse who founded and co-founded both firms, respectively.
“The NAV we have published is around US$22 million and that includes Highland Park as well as Chinamano Corner and our plan is to at least double that in the next two years by adding new properties into the portfolio.
“Listing on the ZSE does not stop us from paying Nostro. I think predominantly our dividends will be paid in Nostro and we have seen that coming through from Delta and Meikles as they recently paid dividends in Nostro. The rentals we collect in US dollars will be passed on in US dollars so you will gain your rental yield where we have collected,” Abrahamse told businessdigest in an interview
The underlying portfolio's rental income and the sale of portfolio assets both contribute to the dividend income, according to Tigere REIT’s sponsoring broker MMC Capital.
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.
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Abrahamse said Mutare was a key area in which the firm seeks to invest capital 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 stated that the fund had been seeded with two properties under Terrace Africa, namely, Highland Park Phase One and Chinamano Corner, both located in Harare.
Highland Park, a planned mega shopping centre, 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 lettable area.
Chinamano Corner, located 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 years of operations, 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.
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.