KINGSTONE ZIMUNYA
HARARE — During its first full operating quarter, ZSE-listed Revitus Real Estate Investment Trust (REIT) managed to post a profit and stay true to its promise of quarterly distributions; as it also continued to revitalize its portfolio of properties.
 |
The REIT listed on the Zimbabwe Stock Exchange on 19 December 2023, only the second ever REIT on the bourse (after Tigere Property Fund).
The National Railways of Zimbabwe Contributory Pension Fund (NRZCPF) is the promoter of the fund, and it is managed and administered by CBZ Asset Management unit Datvest; while Stanbic Bank comes in as a trustee to oversee the interests of investors.
In a trading update for the quarter ended 31 March 2024, the REIT noted a difficult operating environment in the first quarter, dominated by a rapid depreciation of the local currency, high inflationary pressures, and liquidity challenges in the economy; coupled with the economic effects of the El-Nino induced drought.
This in turn added pressures on tenants’ ability to meet their obligations, resulting in low collection rates in Q1 2024; in addition to a low occupancy ratio of 40%.
"The average occupancy and yield ratios were weakened by evictions of tenants in preparation for renovations and termination of non- performing leases," the statement continues.
Regardless, the REIT continued to realise sustainable revenues from its existing portfolio of buildings; managing a net profit of US$102,636. The achieved profit for Q1 was 81% above budget, and the asset managers expect the trend to continue for the rest of the financial year.
Revitus' Net Asset Value stands at $22 539 020, meaning the REIT is managing a Return on Net Assets (RONA) of just 0.46%.
This is understandable, considering the investment the REIT has been making on its properties.
The REIT announced that its pilot refurbishment project — Chester House in Harare, is at an advanced stage. The building will be converted from office use to licensed residential accommodation in the third quarter.
The asset managers have also earmarked Pioneer House in Bulawayo for renovations, meaning there will be a temporary revenue shrinkage after tenant evacuations to make way for commencement of the project.
In spite of most businesses' departure from the CBD due to a range of factors, Revitus is sticking to its urban regeneration stance — refurbish dilapidated city centre buildings for residential and mixed use.
Due to a successful Initial Public Offering (IPO) late last year, the REIT is well-positioned to preserve and grow it's net asset position, revealing;
"Proceeds from the Initial Public Offer (IPO) were largely deployed towards payments to service providers for the revitalisation initiatives whilst the balance went towards purchase of listed equities as a capital preservation strategy whilst awaiting deployment towards actual construction activities."
The statement concluded with a maiden dividend declaration for the quarter ended 31 March 2024 of USD 45,804 (being 0.012 United States cents per unit). The dividend is due to be paid on 13 June 2024.
This is in line with the REIT's prospectus promise to paying quarterly distributions.
Going forward, the REIT is banking on the introduction of the Zimbabwe Gold (ZiG) currency, a relatively more stable structured currency, to enhance business performance for occupants and uplift collection rates.
0 Comments