Requirements to set up a Real Estate Investment Trust (REIT) in Zimbabwe

A Real Estate Investment Trust (REIT) is a regulated investment vehicle which is also known as real estate investment trust scheme registered in terms of the Collective Investment Schemes (Internal Schemes) Regulations, 1998 as read together with the Collective Investment Schemes (Internal Schemes) (Amendment) Regulations, 2019 (No. 5) to own, manage and invest in real estate in Zimbabwe.

There are different types of REITs. The most commons is a Trust REIT which is established under a Notarial Deed of Trust and issues units. The other form of REIT, is the Company REIT which is incorporated, and has a share capital and issues shares.

Some Zimbabwe will have different sector specific REITs, such as:

• Development REITs
• Diversified REITs
• Infrastructural REITs
• Healthcare REITs
• Office REITs
• Retail REITs
• Residential REITS

In order to qualify as a REIT in Zimbabwe, the REIT has to be registered with the Securities and Exchange Commission of Zimbabwe (SECZIM) as a collective investment scheme. The requirements to set up a REIT in Zimbabwe are as follows:

• The REIT must be list on an exchange registered under the Securities and Exchange Act;
• Income must accrue from the REIT;
• The REIT must receive 80% of taxable income from real estate;
• The REIT must distribute 80% of taxable income to shareholders in the form of dividends in each financial year;
• The REIT must have a minimum of 100 shareholders after its first year of qualification, held by five (5) or less individuals during a taxable year.