Zimbabwe property market eyes mixed-use REITs for gains

Zimbabwe’s property market is ripe for mixed-use REITs as diaspora cash and killer industrial yields offer a sweet spot for investors.

African real estate trusts lag global peers

• FBCS points out that the African REIT market is tiny compared to the massive US$4 trillion global scene, which feels like a missed opportunity.
• South Africa is carrying the team with a US$8.5 billion market cap, while Nigeria and Kenya are trailing way behind in the distance.
• Zimbabwe is sitting at just US$261 million, but the report suggests this low number actually highlights a massive gap for potential investors.

High industrial yields favor mixed use strateg

• You are looking at serious returns in the industrial sector, where yields are hitting 12 to 13 percent near informal logistics hubs.
• Retail brings in 7.5 percent, and offices sit at 7 percent, so FBCS thinks a mixed-use structure is the smartest play to balance the risk.
• This approach combines those juicy industrial cash flows with residential exposure, which is safer since it caters to the diaspora market.
• Investors here are wary of economic uncertainty, so they prefer steady dividends over betting on capital appreciation like in other markets.

Diaspora cash fuels property demand surge

• Foreign currency receipts jumped 22 percent to hit US$16.2 billion, and that cash is basically keeping the property sector alive and kicking.
• Diasporans are responsible for about 40 percent of the property demand in Harare, which is a huge chunk of the market right now.
• The informal economy is also reshaping things, creating demand for assets that service the little guys rather than just big corporate tenants.
• Funds under management rose to US$92 million last year, thanks largely to growth from the Seatrite Five REIT and Eagle REIT.