ZHL green-lights REIT
INSURANCE giant, Zimre Holdings, says it has received approval from the Securities and Exchange Commission (SecZim) to list Eagle Real Estate Investment Trust (REIT), which will drive the group’s new investment strategy towards infrastructure and landmark development with an emphasis on sustainability.
Stan Kudenga, the group’s chief executive, told Business Weekly this week that the REIT will be listed on the US dollar denominated stock exchange, the Victoria Falls Stock Exchange (VFEX), in order to enable both local and international investor participation.
“We are now finalising the process and we have already received approval. We were taken aback by some properties that needed finalisation,” he said.
Without giving timelines, the ZHL REIT will become the first REIT listing on VFEX. The market already has the Tigere REIT listed on the Zimbabwe Stock Exchange (ZSE).
Since 2021, ZHL has been going through a culture transformation to align the organisational purpose, strategic values and leadership behaviour.
Prior to that, ZHL in the period 2016 to 2020 moved to recalibrate and reconstruct its organisational structure, seeking to regain and or pursue lost control or influence in select SBUs, disposing of non – core and non - strategic investments.
As a result, the group regained ultimate control of two key SBUs, Zimre Property Investments (ZPI) and short term insurer Credsure with limited dilutive impact on shareholders of 15,69 percent.
ZHL’s chairman, Desmond Matete, in a statement of financials for the year ended December 31, 2022 said the renewed energy, including the various initiatives the Group is embarking on, are set to bring value realisation to the shareholder and the community at large.
“These activities will be undertaken through its Eagle Real Estate Investment Trust (REIT) to enable both local and international investor participation,” he said.
Matete said given ZHL’s proven resilience over the years, the Group is focused on growing sustainable value for its stakeholders in a turbulent global economy.
ZHL operations span across the region, with presence in Mozambique, Malawi, Zambia and Botswana and the regional operations are housed under the company, Emeritus International, domiciled in Botswana.
“The strategy is set to harness the various strengths of its new structure and strategic partnerships to drive capacitation of its regional units and to expand its footprint further into the African continent,” the chairman said.
In spite of the significant challenges in the Group’s operating jurisdictions, the Group delivered positive results, benefitting from the resilient performances of its underlying businesses.
In historical terms, Gross Premium Written (GPW) was $17,3 billion, a 272 percent increase from the same period prior year on the back of real business growth in the region and from domestic operations.
The regional operations contributed 43 percent to GPW in 2022 compared to 41 percent in 2021 and thus remain key strategic investments which provide diversification value to the Group.
Inflation adjusted Group total expenses grew by 36 percent from $22,1 billion recorded in prior year to $30,1 billion in the current year and in historical cost terms, expenses grew by 457 percent from $7,6 billion in 2021 to $42,3 billion in 2022.
“The spike in expenses was on account of unprecedented high claims experience in the non-life reinsurance entities as a result of climate change effects.
“Going forward, the Group will be improving its underwriting practices using innovative technologies to counteract climate change effects on its key reinsurance business lines,” said Matete.
He added that local non-life reinsurance operations were hit the most by high agriculture claims resulting in a claims ratio of 71 percent while operating and administration expenses spiked due to exchange rate driven inflationary pressures experienced primarily in Zimbabwe.
The Group’s historical cost terms, profit after tax increased by 330 percent from $5,4 billion in 2021 to $23,2 billion in 2022 and the growth is on account of fair value gains on financial assets and investment properties as well as strong topline growth in some business units.
The Group’s total assets increased by 51 percent in real terms from $80,7 billion as at 31 December 2021 to $122,2 billion as at 31 December 2022.
Asset growth was driven by investment properties and equity investments which account for 67 percent of the Group’s total assets.
Matete said the Group’s healthy balance sheet position is evidence of its resilience and commitment to provide its stakeholders with “security, growth and profitability”.