REITs critical for raising capital for real estate development: Minister Prof Ncube

21 Nov, 2023 - 15:11 0 Views

The Sunday News

Judith Phiri, Business Reporter

THE Minister of Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube has called on the diaspora community to make use of the real estate investment trust (REITs) to raise capital for real estate development.

REITs are regulated investment vehicles under the Collective Investment Scheme Act 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.

Speaking at the inaugural Matabeleland North Diaspora Investment Conference, which ended on Saturday, the Minister said REITs were key to raising capital for property development.

“To years ago, I actually introduced what we call a real estate investment trust (REIT), it’s a complicated sounding thing, but what it has done, it has allowed companies to raise capital from the public through pension funds to support property developments,” he said.

“A company like Tigere REIT, some of you have never heard of it, was launched entirely on the back of REIT programme that we launched as the Government. So, if you are into property development make use of some of these instruments do not be shy, go big and take risks.”

Pro Ncube said such instruments came with so many tax advantages to raise capital from the public including pension funds.

He said in the next couple of weeks they will be listing the second REIT from one of the pension funds on 15 December in Victoria Falls.

“The pension fund has understood what we are trying to do as the Government in supporting investors. Members of the diaspora please take advantage of this REITs programme and use it to raise capital for real estate development,” he added.

Last week, the National Railways of Zimbabwe Contributory Pension Fund (NRZCPF) launched its REIT Fund (Revitus REIT) which is meant to draw funds from investors for the purpose of renovating their old properties.

The REIT is expected to be listed on ZSE mid-December.

This will be the second REIT to be listed after Tigere REIT, which was listed last year. Tigere REIT is affiliated to Terrace Africa Asset Management.

In July, the ZSE launched the REIT Association of Zimbabwe which is targeted at promoting the growth of the REIT market, to educate investors as well as to advocate for the interests of REITs with regulators and policymakers.

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