Zambia’s property market has taken a historic leap forward with the launch of the country’s first Real Estate Investment Trust (REIT). In June 2024, Real Estate Investments Zambia Plc (REIZ) converted to REIT status and listed on the Lusaka Securities Exchange (LuSE), opening the door for ordinary Zambians to own shares in a portfolio of income‑producing properties without the headaches of direct ownership [7][10].
REITs are more than a new ticker on the exchange; they are a tax‑efficient vehicle that delivers regular income, portfolio diversification, and improved market liquidity. This guide explains how REITs work globally, how they fit into Zambia’s regulatory framework, and why they matter to investors, the property sector and the broader economy.
A Quick Primer on Global REITs
Real Estate Investment Trusts were created in 1960 in the United States to democratise large‑scale real‑estate investing [9]. Today, over 40 countries host REIT regimes, and listed REITs own trillions of dollars’ worth of real estate worldwide. Investors buy and sell REIT shares as easily as common stock, receive dividends sourced from rental income, and avoid the illiquidity of bricks‑and‑mortar transactions.
Zambia’s REIT Journey
Laying the Legal Groundwork
- Guidelines 2020: The Securities (Real Estate Investment Trust) Guidelines of 2020 built on the Securities (Collective Investment Schemes) Rules of 1993 to set capital, diversification and disclosure rules [6].
- SEC Oversight: The Securities and Exchange Commission (SEC) approves each REIT, supervises trustees and custodians, and enforces the 75 % distribution rule—three pillars that protect investors [5][10].
The Breakthrough Listing
After a decade of stakeholder consultations, REIZ secured SEC approval and re‑listed as the first Zambian REIT in June 2024—denominated and traded in U.S. dollars to match its mainly USD rental stream [10]. The debut unlocked a path for future REITs and signalled deepening sophistication in Zambia’s capital markets.
How a Zambian REIT Operates
| Feature | Requirement / Practice | Why It Matters |
| Asset Mix | ≥ 80 % in real estate; ≤ 20 % in cash‑like instruments [10] | Keeps the vehicle “property‑heavy” while retaining flexibility |
| Single‑Property Cap | ≤ 25 % of NAV in any one property [10] | Provides built‑in diversification |
| Development Ban | No vacant land or property development [10] | Focuses on income‑producing, stabilised assets |
| Payout Rule | ≥ 75 % of distributable income paid each year [6] | Delivers predictable dividends and tax benefits |
| Listing Currency | USD for REIZ [10] | Aligns with USD leases; hedges kwacha risk |
Portfolio Snapshot: REIZ
REIZ owns prime commercial assets—Acacia Park, Jacaranda Mall and Lewanika Mall—plus legacy residential units [7][13]. Rent flows into a central pool, expenses are deducted, and at least 75 % of what remains is distributed to shareholders every year.
Why REITs Matter to Investors
Retail Investors
- Low Capital Threshold – Buy exposure to multi‑million‑dollar malls with a few hundred kwacha.
- Steady Income – Mandatory payouts translate into regular dividends.
- Easy Entry and Exit – LuSE trading replaces lengthy property sales.
- Dollar Hedge – REIZ’s USD pricing offers a natural currency buffer [10].
Pension Funds & Asset Managers
- Diversification – Real‑estate returns show low correlation with equities and bonds [1][4].
- Transparency – Public reporting, audits and SEC monitoring reduce information risk.
- Cash‑Flow Matching – Reliable dividend streams suit long‑term liabilities.
Why REITs Matter to Zambia’s Economy
| Impact Area | Benefit |
| Capital Formation | Mobilises domestic and international savings into property upgrades and new builds [6]. |
| Professional Standards | Drives best‑practice valuation, governance and ESG reporting [10]. |
| Employment | Generates jobs in property management, maintenance and ancillary services. |
| Market Depth | Adds a new asset class to LuSE, attracting global investors seeking frontier‑market yield. |
Current Market Performance & Outlook
- Revenue Momentum: REIZ grew revenue 18 % in the half‑year to September 2023 [7].
- Improved Bottom Line: Loss after tax narrowed 70 %, signalling better cost control.
- Growth Ambition: Management plans to inject more assets and rival top southern‑African REITs [7][17].
- Peer Potential: Kenya, Nigeria and South Africa already host multiple REITs [13][15]; Zambia is poised to follow as developers seek cheaper funding and investors hunt yield.
Key Takeaways for Would‑Be Investors
- Start Small, Learn Fast – A single LuSE trade delivers instant exposure to professional property management.
- Think Long Term – REITs shine when income is reinvested and compounded over years.
- Stay Informed – Track tenant occupancy, interest‑rate trends and SEC notices; these factors move REIT prices.
- Diversify Wisely – Blend REIT holdings with conventional shares, bonds and cash for a balanced portfolio.
Conclusion
The arrival of REITs marks a turning point for Zambia’s real‑estate and capital‑market sectors. By pooling investor funds, mandating high payout ratios and trading on LuSE, REITs unlock property wealth for the many, not the few. As regulatory experience grows and new sponsors follow REIZ’s lead, REITs are set to channel billions into Zambia’s commercial infrastructure, create steady income for savers and add a resilient layer to diversified portfolios. The opportunity is real, the structure is proven—now the market awaits its next wave of listings.
