Terrace Africa widens focus
Image Credit: Terrace Africa
REGIONAL property developer Terrace Africa (TA) says it is widening its focus in Zimbabwe beyond commercial real estate after seeing “amazing returns” on its investments in the country.
Managing director Brett Abrahamse said the company’s solid working relationship with the Zimbabwe Investment and Development Agency (ZIDA) over the past two years had also provided impetus for TA to expand its horizons in the country.
The company has been developing commercial real estate in the country since 2014 and has some of the country’s premier convenience retail properties in its portfolio, including Highland Park and Borrowdale Village Walk.
“We historically have been convenience retail focused… but going forward, we’re going to take a much more global view of investment within Zimbabwe,” Abrahamse told The Financial Gazette last week.
“Some of our new projects will consist of hotels, some commercial offices, while some will consist of residential.”
The company has also developed commercial property in Mozambique, South Africa and Zambia, but its highest returns have come from properties in Zimbabwe, according to Abrahamse.
“We’ve had almost seven years of Village Walk since its opening in 2017 and if I am to judge the performance in terms of yield, it has outperformed other assets within the region… we’re getting amazing returns there.
“Well-located real estate in any country does extremely well and because of the historic under-supply in Zimbabwe over the last 20 years, our performance here has been extremely attractive.
“We will continue to invest as long as that is the case.”
Abrahamse said the company intended for the Highland Park project’s ongoing expansion to be its “flagship” property.
The Highland Park Precinct is a property in Harare’s Highlands along ED Mnangagwa Road that is undergoing extensive construction work.
TA broke ground on the project in 2020 with the Highland Park Shopping Centre.
The ongoing second phase will provide a further 200 000 square metres of mixed-use commercial and residential space within the suburb.
The precinct is located seven kilometres northeast of Harare’s central business district, between Hurworth and Pevensey Roads, and will feature a pedestrian-friendly design that incorporates additional retail, a design quarter, multi-story offices, a hotel with conferencing facilities, medical suites, and residential apartment complexes, according to TA.
The company says the development will also incorporate the latest green building standards and smart technology to ensure sustainability and security.
As part of the company’s renewed focus on Zimbabwe, TA obtained a ZIDA license that permits it to bring in more foreign investment, something Abrahamse believes has accelerated the pace of the company’s operations in the country.
“The first few projects, we funded out of local funds… but since 2020, when we decided that Zimbabwe was going to be an important part of our business going forward, we chose to bring more money in from offshore and get an investment license through ZIDA.
“So, we are going to register all our new investments with ZIDA, they give us the confidence that you’ve got like a big brother assisting you.
“It’s been great because you can bounce ideas off them and you get exposure that you wouldn’t normally get.
“I believe that Zimbabwe is going to see a surge in international investment over the next five years because of ZIDA and the fact that they’re a one-stop shop is cheery on top,” Abrahamse said.
The company has already invested more than US$75 million in Zimbabwe with about US$60 million worth of retail projects in the pipeline for the next three years.
Abrahamse said the Highland Park Precinct alone had the potential to soak up as much as US$200 million
“We have committed some of the seed money to make sure that that the investment happens but we are confident that there is going to be a lot of backing from other International businesses to invest alongside us to make that a success.”
In 2022, TA was involved in the listing of Zimbabwe’s first-ever exchange-traded Real Estate Investment Trust — Tigere Property Fund.
According to Abrahamse, the instrument enabled TA to offer its local pension fund partners favourable conditions for investing in real estate without taking on too much liquidity risk.