Create foreign currency REIT, Mthuli tells NRZ

Ncube urged the pension fund to support its mother company, the National Railways of Zimbabwe, to manage its properties better to improve its balance sheet.

Finance, Economic Development and Investment Promotion minister Mthuli Ncube has urged the National Railways of Zimbabwe Pension Fund to leverage its foreign owned assets on the creation of a foreign currency real estate investment trust (REIT).

The pension fund is responsible for the setting up of the Revitus REIT which listed on the Zimbabwe Stock Exchange yesterday after a capital raising exercise which hauled ZWL$48 551 516 400 to spruce up the pension fund’s assets.

The initial public offering was 18,27% subscribed showing low appetite in the REIT. The first listed REIT, Tigere, was subscribed by 94,2%.

“As the NRZ Pension Fund you have some properties in the United Kingdom, is it true that you were trying to sell those shares? Please do not sell them,” Ncube said at the listing of the Revitus REIT yesterday.

“What you could do is create another REIT in foreign currency and list it on VFEX (Victoria Falls Stock Exchange). That way you will raise more capital and invest more. We allowed pension funds to invest offshore.”

Ncube urged the pension fund to support its mother company, the National Railways of Zimbabwe, to manage its properties better to improve its balance sheet.

“Another thing is that you should support your mother company. They have their properties. They too should not be selling those properties. They should manage those properties properly and better,” he said.

“They also have assets offshore in South Africa, there is some land along the railway line from Zimbabwe to Cape Town (in South Africa), and the land on either side of the railway line belongs to the two countries. I am just saying that those assets can improve the balance sheet if utilised.”

The listing of the Revitus REIT on the ZSE was the second after the Tigere REIT with five licensed REITs still to list.

“And just over a year ago, I had the privilege to also officiate at the listing of the Tigere REIT, which was the first REIT to be listed on the ZSE. The listing of the Revitus REIT, adds significance in that it is the first REIT to be licensed by the Securities and Exchange Commission of Zimbabwe and the first being promoted by a pension fund to list,” Ncube said.

He added that setting up of REITs by pensions funds would aid in motivating others who were over-exposed to the real estate asset class to use those properties to access liquidity from the capital markets.

This, he said, would position pension funds to pay member benefits timeously.

“That explains why in my 2020 Budget statement, I specifically excluded pension funds from the requirement that buildings that have to be part of a REIT should only be new buildings, taking cognisance that most pension funds were already sitting on vast buildings in need of a revamp,” he said.

The Revitus REIT seeks to revitalise the dilapidated buildings in the central business districts of Harare and Bulawayo which are its current assets.

Under this plan, the group is targeting to renovate Chester House, Electra House, Africa House and Atlas House in Harare, as well as Pioneer House in Bulawayo.


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