Staff Writer
Old Mutual is preparing to launch a US$46,2 million Development Real Estate Investment Trust (REIT) on the Victoria Falls Stock Exchange (VFEX), expanding the range of long-term investment assets available to institutional investors.
The US dollar-denominated REIT, sponsored by Old Mutual Life Assurance Company and managed by Old Mutual Investment Group, is expected to open for subscriptions in the third quarter of 2026 before listing on the VFEX later in the year.
The investment vehicle will initially finance The Grange Lifestyle Estate, a 47-hectare mixed-use development in Harare’s northern suburbs, before broadening its portfolio to include other commercial real estate projects across Zimbabwe.
For life insurers, pension funds and other institutional investors, development-focused REITs present an opportunity to deploy long-term capital into assets capable of generating sustainable income while benefiting from capital appreciation during construction.
Unlike traditional REITs, which typically acquire completed income-producing properties, the Development REIT allows investors to participate from the development stage.
This gives investors exposure to value creation throughout the construction process before assets begin generating recurring rental income.
The structure is increasingly viewed as an important investment option for institutions seeking hard-currency assets that align with long-term liabilities, particularly in an environment where demand continues to grow for diversified investment products capable of preserving value and generating stable returns.
According to the investor prospectus seen by Insurance24, the inaugural project is supported by clean freehold title, approved subdivision plans and all the required development permits, reducing many of the execution risks commonly associated with large-scale property developments.
The Grange Lifestyle Estate has been designed as an integrated mixed-use precinct combining retail, healthcare, office and premium residential developments.
The diversified tenant mix is expected to create multiple rental income streams while reducing concentration risk within the portfolio.
The three-phase development carries an estimated cost of US$46,2 million, excluding VAT, and is scheduled for completion over approximately three years. Once fully operational, it is projected to generate a gross rental yield of about 7,1 percent.
The retail component, valued at US$28,8 million, represents the largest investment within the estate.
It will provide approximately 22 536 square metres of gross lettable area, incorporating a supermarket, premium motor vehicle showroom, restaurants, entertainment facilities, line shops and a modern gymnasium.
Old Mutual says anchor tenants for Phase 1A have already been secured, while negotiations with prospective tenants for Phase 1B are at an advanced stage, strengthening the project’s commercial outlook before completion.
The estate will also include a US$4,8 million specialist medical clinic offering approximately 3 400 square metres of healthcare space for specialist practitioners.
Healthcare assets are widely regarded by institutional investors as resilient investments because demand for medical services remains relatively stable throughout economic cycles, supporting dependable long-term rental income.
A third phase will deliver a Grade A office park valued at approximately US$12,6 million, providing 8 685 square metres of premium office accommodation.
Construction will be phased to align with market demand and limit vacancy risk, while additional land within the estate provides capacity for future expansion without further acquisition costs.
Beyond its flagship development, the REIT has been structured with a broader investment pipeline aimed at enhancing long-term portfolio growth.
Among the projects under consideration is a 130-room internationally branded four-star hotel in Victoria Falls. The property is expected to be owned by the REIT and leased to an independent hotel operator, allowing investors to benefit from tourism-related income while limiting operational exposure.
Old Mutual is also evaluating a mixed-use commercial development in Borrowdale on a consolidated 7,4-hectare site.
The proposed project is expected to include Grade A office space, an internationally branded hotel, serviced apartments and convenience retail facilities, reflecting continued demand for premium commercial developments in Harare’s northern suburbs.
The proposed REIT underscores the increasingly important role institutional investors, particularly insurers and pension funds, continue to play in mobilising long-term capital for productive infrastructure and property development.
As Zimbabwe’s capital markets broaden the range of investable assets, development-focused REITs are expected to become an increasingly important vehicle for matching long-term liabilities with income-generating real assets while supporting economic development.
