I.H Securities has initiated coverage of Pfuma Fund REIT with a hold recommendation, citing its US dollar-denominated income base anchored by stable seeded assets and medium-term upside from an expansion pipeline expected to double gross lettable area this year.
The call signals measured optimism: while the current market price largely reflects the value of existing properties, upside is expected to come from a development pipeline that could significantly lift net asset value (NAV), rental yields and investor distributions over the next three to four years as new projects are completed and income streams
stabilise.
Pfuma Fund REIT was listed on the Victoria Falls Stock Exchange on February 6, with trading commencing on February 9, after raising US$25 million at a 100% subscription level. Its market capitalisation stood at US$65,99 million at the close of its first trading day and had risen to US$74,14 million as of Monday.
Launched by Arctic Blue Asset Management, the REIT debuted with an estimated total asset value of US$23,74 million. NAV is projected to increase to US$46,73 million as developments are executed. IH Securities is the designated sponsoring broker.
“We are initiating coverage on Pfuma Fund REIT with a HOLD recommendation, with a buy-into-weakness consideration. The REIT offers a unique hybrid proposition: the stability of a cash-generative, USD-denominated seeded portfolio combined with the aggressive growth potential of a development fund,” IH Securities said in an investment note.
The firm noted that the US$0,10 issue price aligns closely with the fair value of the existing portfolio, but argued that the medium-term case strengthens as higher-yielding projects come on stream in underserved growth nodes.
The expansion pipeline includes Cork Corner in Avondale and four greenfield developments: Project Eastlea and Project Chivhu (fast-food drive-through sites), Project Yellowstone in Kwekwe (a mixed-use retail centre), and Project Silverbrook in Ruwa (a wholesale retail centre with a fuel station).
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Collectively, the projects are expected to add about 18 000 square metres of additional lettable space and generate gross rental yields of around 11% in their first full year of operations.
IH Securities said Pfuma’s strategy differentiates it from pure income REITs that rely primarily on rental escalations for growth.
The REIT has a defined road map to expand its gross lettable area from approximately 16 100 square metres to over 35 000 square metres by the end of 2026, effectively more than doubling its footprint,” IH Securities said.
As the projects transition from development assets into completed, income-generating properties, NAV is forecast to rise from about US$46,73 million in 2026 to US$53,93 million as construction risk unwinds and income streams stabilise.
While the REIT’s current yield profile is modest, it is structurally positioned to improve as higher-yielding assets are commissioned, IH Securities said.
Seeded assets such as Hogerty Hill Centre yield around 6,6%. In contrast, targeted gross yields are approximately 12,2% at Silverbrook (Ruwa), 12,7% at Chivhu and 9,2% at Yellowstone (Kwekwe).
As these developments come online, the blended portfolio yield is projected to rise from 5,9% in 2026 to roughly 8,5% by 2029 — supporting stronger distribution capacity and providing a hedge against localised inflation.
The REIT was initially seeded with two flagship retail properties — Hogerty Hill Centre in Harare and Chegutu Retail Centre.
The centres are anchored by blue-chip tenants including TM Pick n Pay, Simbisa outlets, and DisPharm, ensuring stable, USD-linked rental income. The centres are anchored by blue-chip tenants including TM Pick n Pay, Simbisa outlets and DisPharm, ensuring stable, USD-linked rental income.
