The Sunday News
Judith Phiri, Business Reporter
THE country is expected to witness new capital market products with Real Estate Investment Trusts (REITs) listings expected this year.
A REITs is a regulated investment vehicle that enables the issuer to pool investors’ funds for the purpose of investing in real estate. In exchange, the investors receive units in the trust and as beneficiaries of the trust share profits from the real estate assets.
The Zimbabwe Stock Exchange (ZSE) announced the REITs listings in 2020, but listings have been taking long to debut on the bourse with issuers demanding more investor-friendly regulations. Indications from the bourse are that a couple of issuers are interested in putting up their properties on the ZSE.
Zimbabwe Stock Exchange (ZSE)
Securities and Exchange Commission of Zimbabwe (SecZim) acting chief executive officer (CEO) Mr Gerald Dzangare told Sunday News Business that REITs allow investors to reap benefits of indirectly owning property.
“As Zimbabwe’s property market is expected to develop, REITs are a potential way for more investors (including retail investors) to participate in large-scale income producing properties. They allow investors to reap benefits of indirectly owning property as an asset class,” said Mr Dzangare.
He said with the country expecting more exchanges and listings, other products such as REITs were in the pipeline. Mr Dzangare said with the listing of properties under REITs, an average person could participate with a group of other people in listing a building or a property so that they can get returns.
“As the capital markets continue to grow, we are excited about some of the products such as REITs and Exchange Traded Funds (ETFs). Capital markets play an important role in economic development as they boost investor confidence, bringing in new capital.”
He said derivatives were also coming through in terms of commodity derivatives and agricultural produce derivatives.
“We also have got bonds. As you know our country has the National Development Strategy 1 (NDS1) and there is a lot of infrastructure development required and the funding for those infrastructure can actually be done through bonds. We will be listing bonds on our exchanges in order to fund these developments. So, for us all those listings speak to the development of the country.”
Meanwhile, the commission is putting in place rules that encourage listed companies to be conscious about the environment.
“We are putting in place rules whereby our exchanges’ listed companies will be reporting more on green issues, more on the impact of the environment and the future. We are not only here for today’s returns but we want a sustainable future so we are looking at responsible investments and business models that also attract foreign investors who are very much interested in green issues,” said Mr Dzangare.
He said most foreign investors were geared towards green issues, such as climate change and the impact of businesses on the planet and especially the future of the planet.
