BUSINESS REPORTER
For decades, Zimbabwean pension funds have been investing in real estate asset class, recognising the important role it plays within investment portfolios to help build a diversified portfolio and manage risk, while hedging against inflation.
As an asset class, real estate demonstrates valuable and distinct investment characteristics that have made it a staple in pension investment portfolios.
Aware of that, Zimbabwean investors, mainly pension funds, are working on plans to take over a US$113m (N$1.8bn) property, The Grove Mall of Namibia, in Windhoek.
Namibia is an attractive market for Zimbabwean companies due to its stability.
The Namibian economy is projected to have grown by 2.6% in 2021 and estimated to expand by 3.3% in 2022, on the back of a steady recovery in the financial services, tourism, retail and wholesale trade, and the mining industries — combined with an improvement in the regional and global economic environment
The major deal, which is at an advanced stage, is being coordinated by two local financial companies Stratus Capital Partners, an asset management firm, and Bard Santner Markets Inc, a new Harare-based financial advisory firm.
Bard is the lead financial adviser, while the Chikuni Shenjere-Mutiswa-led Stratus Capital Partners brokered the deal.
Shenjere-Mutiswa is an experienced chartered financial analyst.
Bard is led by local banker Senziwani Sikhosana, who has over two decades experience in banking, investment, and capital markets.
At Bard, Sikhosana works with a local business consortium which includes Tatenda Hungwe, Alfred Mthimkhulu and international finance expert Vinod Bussawah from Mauritius.
Market sources say Bard and Stratus are negotiating with local pension funds to invest in the massive regional property which has an annual turnover of N$890m (US$56m).
The sources say pension funds are keen to acquire the property from South African property giant, Atterbury Property Holdings, owned by the JSE-listed Atterbury Group.
Atterbury is a real estate development, investment and management company.
It develops prime mixed-use, commercial, retail and industrial properties.
From its South African roots, it has spread its wings across Africa and into Europe.
It has developed a number of properties in South Africa, sub-Saharan Africa and Europe worth billions.
Bard chief executive officer Sikhosana could not give details on the deal.
“I’m sorry, we can’t comment on the deal now. We let you know when we are ready,” he said.
Shenjere-Mutiswa, the Stratus chief executive officer, was not available for comment.
However, a source said the transaction is almost consummated.
“Negotiations are still ongoing, but they are now at an advanced stage. Atterbury, a South African property development company, is selling equity in The Grove Mall of Namibia for N$1.8bn (US$113m). Zimbabwean companies are interested in investing in the property which is being sold by Bard and Stratus in Harare,” a source said.
Until recently, pensions funds invested primarily in stocks and bonds, often using a liability-matching strategy.
Now they increasingly invest in a variety of asset classes, including private equity, real estate, infrastructure, and securities to hedge inflation.
The current Pension and Provident Funds Act in Zimbabwe is being amended through the Pensions and Provident Funds Bill to modernise and strengthen the regulation and supervision of the pensions industry, while giving them flexibility to invest in other markets.
There has been very little legislation on the subject of pensions law with the current law statute having been promulgated in 1976.
However, the adoption of the 20213 constitution and the Justice Smith Commission of Inquiry of 2017 has brought with it great optimism and potential enormous impact on the pensions sector.
Provision of pensions is of fundamental economic and social importance, ensuring the successful delivery of adequate retirement income.
The promise to pay a benefit during retirement to today’s workers, covers a period that can span many decades.
The capacity to meet these promises is one of the most important issues in the design of retirement systems.
Policymakers mistakenly conclude that a pension system is financially healthy because it is generating short term surpluses.
The effective supervision of pensions, and of the institutions that provide pension products and services, is required to ensure the protection of pensioners.
Built by Howard & Chamberlain Architects through investment from Atterbury Property, Attacq Ltd, The Frontier Property Trust and Demushuwa Property Developer (Pty) Ltd, The Grove, located in the Hilltop mixed-use estate in Kleine Kuppe in the southern Windhoek suburbs.
It is the largest shopping centre ever to be developed in Namibia, measuring 55 000m², at a cost of N$1bn (US$62.5m).
A sources said the deal provides a good opportunity for pension funds in Zimbabwe to invest in the region and make inroads into the regional markets.
Kleine Kuppe and its environs is currently the fastest growth node in Windhoek.
The mall has easy access from almost all suburbs in Namibia’s capital as well as to both international airports.
The primary focus of the mall is on retail and entertainment.
It has all the big retail shops found in South Africa and elsewhere in the region.
