Two REITs plan VFEX listings before year-end

STAFF WRITER

Two real estate investment trusts (REITs)-Eagle Fund and Pfuma Fund – will list on the Victoria Falls Stock Exchange (VFEX) before year end, it has been learnt.

Eagle Fund is a REIT product controlled by ZIMRE Holdings Group, whereas Simbisa Brand runs Pfuma Fund.

On the one hand, the Eagle Fund aims to raise cash for the development of medical and residential facilities in the resort city of Victoria Falls and Mazowe, among other areas. On the other hand, the Pfuma Fund seeks to raise funds for a portfolio of properties in the capital Harare and Chegutu.

The development was confirmed by Justin Bgoni, the ZSE CEO.

He told Business Times, a market leader in business, financial and economic reportage, that the two investment funds hope to raise more than US$50m for their upcoming projects.

“We are expecting at least two REITS – Eagle REIT and Pfuma REIT- to list on the VFEX this year. Over US$50m is expected to be raised,” Bgoni told Business Times.

VFEX, a subsidiary of the  Zimbabwe Stock Exchange (ZSE), which is denominated in the United States dollar, was established in 2020 to spearhead the development of the International Financial Services Centre in Zimbabwe.

A REIT is now a popular instrument, which pools investor funds into real estate investments,  introduced to attract investment in the real estate sector by monetising rent-yielding assets and share profits from the investment.

REITS helps unlock the massive value of real estate assets and enables the participation of retail investors.

  Tigere Fund, which debuted on the ZSE in 2022, was the first REIT to list in Zimbabwe.  Following its official listing in December of last year, the Revitus REIT became the second REIT to be listed on the ZSE.

One of the primary advantages of REITs in Zimbabwe is that they are exempt from corporation tax at the company level.
This indicates that the unit holders are the ones who pay the tax. The authorities have mandated that only properties constructed after 2020 or held by tax-exempt entities, such as pension funds, can be included in REITs in order to ensure that  this tax is not abused.

The VFEX has witnessed a plethora of listings in recent months, with Invictus Energy Limited becoming the 16th listing on the VFEX in Zimbabwe last month. This followed a US$10m strategic institutional placement.

Other companies listed on the VFEX include the African Sun Limited, Axia Corporation Limited, Bindura Nickel Corporation Limited, Caledonia Mining Corporation, First Capital Bank, Innscor Africa, Karo Mining Holdings, National Foods Limited, Nedbank Group Limited, Padenga Holdings, Seed Co International, Simbisa Brands Limited and Edgars Stores Limited.

All international companies invested in Zimbabwe can seek listing on VFEX.

In keeping with Vision 2030, which calls for significant foreign investment, the government has pledged to keep the VFEX a foreign exchange market. The VFEX offers tax benefits and is intended to serve as a vehicle to attract international investment to the country.