• About 91.5% of eligible Tigere units elected scrip, preserving approximately US$917,000 in cash
• The retained amount is equivalent to about 71% of Electrosales Zvishavane’s proposed US$1.3 million purchase price
• The unit base rises about 1.54%, moving the test from investor participation to post-acquisition income per unit

Harare — Tigere Real Estate Investment Trust will issue 28.34 million new units after holders representing 91.48% of eligible units elected to receive their second-quarter dividend in scrip, preserving approximately US$917,000 of a US$1 million distribution as the fund continues negotiations to acquire the US$1.3 million Electrosales property in Zvishavane.

The results, announced on 8 September after the election period closed on 2 September, move Tigere’s first scrip dividend from a proposed funding mechanism into an implemented capital-raising tool. Holders representing 1.684 billion units elected scrip, 2.64% elected cash and another 5.88% did not respond, leaving them on the default cash option.

Tigere will consequently issue 28,335,929 new units in lieu of cash, taking the unit base from approximately 1.841 billion to 1.869 billion units. The additional units increase the fund’s issued capital by about 1.54%, establishing a measurable hurdle for the income generated from the capital retained through the exercise.

The development advances a funding strategy announced with Tigere’s half-year results in July. The fund declared a second-quarter distribution of US$1.003 million, equivalent to 0.05449 US cents per unit, and introduced a scrip alternative that allowed investors to receive additional units while cash remained available as the default option. Management said the cash preserved through scrip would be used towards acquiring a third-party asset in Zvishavane, subject to approvals and completion of due diligence. 

The 91.48% election rate means approximately US$917,000 of the original distribution is economically represented by scrip rather than cash, based on the proportion of units electing the alternative. Tigere’s latest notice puts the remaining gross dividend payable to unitholders at US$86,380.45, inclusive of withholding taxes applicable to the cash and scrip options.

That participation rate addresses the first uncertainty surrounding the mechanism when it was introduced. Tigere could offer investors the option to reinvest their distributions, while the amount of cash ultimately retained depended on how many holders were willing to surrender immediate cash income for additional exposure to the REIT.

The outcome gives management substantially more acquisition capacity than would have remained had most investors taken cash. Tigere held US$1.75 million in cash and cash equivalents at 30 June 2026 and carried no interest-bearing debt, leaving the fund with balance-sheet flexibility before the scrip election. The retained distribution should not be added mechanically to the June cash balance to describe Tigere’s current liquidity because operating and investing cash movements have occurred since the reporting date, though approximately US$917,000 that could otherwise have been distributed has remained available within the funding structure.

The immediate deployment target remains Electrosales Zvishavane. Tigere’s half-year presentation proposed acquiring the Kandodo property from Powerspeed Electrical through a sale-and-leaseback transaction for US$1.3 million excluding value-added tax, with annual rental income of US$143,400, a 10-year lease, annual escalation of 3% and a net initial yield of 11%. The proposed lease is structured as triple net, transferring specified property operating costs to the tenant and improving the relationship between contracted rent and income available to the property owner. 

At approximately US$917,000, the capital preserved by the scrip election is equivalent to roughly 71% of Electrosales’ proposed US$1.3 million purchase price before value-added tax and transaction costs. The remaining purchase consideration would therefore require approximately US$383,000 from Tigere’s other available funding sources if the transaction closes on the previously disclosed terms.

This is where the September development begins to test the investment case established in July. Tigere had identified five transactions for its second-half pipeline, including Electrosales Zvishavane, Design Quarter and Parkade, Cardinals Corner, Kadoma Retail Centre Phase One and Gweru Retail Centre Phase One. The scrip election has created additional internal funding capacity for the first identified third-party transaction, while its approximately US$917,000 contribution remains small against the capital required to execute the wider pipeline.

Electrosales consequently becomes a useful test of capital productivity. The property’s disclosed 11% net initial yield sits above Tigere’s guided 2026 distributable-income yield on net asset value of 6.8% to 7.1%, providing a basis for management’s description of the acquisition as yield-accretive. Tigere’s 2026 dividend-per-unit guidance stands at between 0.21 and 0.24 US cents. 

The acquisition still has to translate that property-level yield into a better outcome for each unit. Tigere is increasing the denominator over which future distributable income is divided by about 1.54%, meaning growth in total property income alone will provide an incomplete measure of whether the scrip strategy has created value.

That distinction has already become relevant during Tigere’s recent expansion. In the first half of 2026, distributable income grew substantially as acquisitions enlarged the portfolio, while the increase in per-unit measures was considerably smaller because earlier acquisitions had also expanded the unit base. The September scrip issuance is much smaller than those previous acquisition-funded placements, though the same capital-allocation discipline applies to the new units.

The fund reported funds from operations per unit of about 0.11 US cents for the first half, while dividend per unit increased 14.5% and distributable income per unit rose 13.3%. Those measures become more important as Tigere enters another acquisition cycle because they establish whether additional properties are enlarging the income available to each unit alongside the overall asset base.

Electrosales also has characteristics that can help that calculation. The disclosed annual rent of US$143,400 against a US$1.3 million acquisition price produces the stated 11% initial yield, while the 10-year lease and 3% annual escalation provide contracted income progression if the transaction proceeds on the disclosed terms. The triple-net structure can further protect property-level income by limiting the operating expenses absorbed by the landlord.

The transaction had not been completed by 8 September. Tigere said it remained engaged in negotiations to acquire a yield-accretive property from Electrosales in Zvishavane and would issue a further market update on the proposed transaction. That keeps acquisition price, completion and final transaction terms among the outstanding tests rather than established outcomes.

Timing has also become relevant. The acquisition was identified in July for execution during the third quarter, leaving the remainder of September for the transaction to meet that original timetable. Continued negotiations do not establish a delay at this stage, though completion after the third quarter would push the income contribution further into the financial year and reduce the period over which Electrosales can contribute to 2026 distributions.

Tigere’s capital structure gives management other funding options as the pipeline expands. The fund entered the second half with zero leverage, while its investment property portfolio stood at US$58.45 million and total equity at US$59.57 million. That leaves borrowing capacity available should management decide that debt can fund part of the acquisition programme without placing excessive pressure on distributions.

The scrip election reduces the immediate requirement to use that capacity for Electrosales. Preserving capital equivalent to about 71% of the disclosed purchase price allows a substantial part of the proposed acquisition to be financed through cash that would otherwise have left the fund as a distribution, limiting the amount that needs to come from existing liquidity or another financing source.

That becomes more consequential when set against Tigere’s quarterly distribution model. The fund has been paying approximately US$1 million per quarter and has guided towards maintaining at least that level during 2026. Repeated high participation in future scrip elections could turn part of that distribution stream into a recurring source of internal acquisition capital, although every additional issuance would also increase the number of units participating in subsequent distributions.

The September result therefore settles the participation question and opens a harder capital-allocation test. Investors representing more than nine-tenths of eligible units have accepted additional Tigere units in place of cash, giving management approximately US$917,000 of retained capital to deploy while increasing the unit base by about 1.54%.

Electrosales is now the first measurable test of what management earns on that capital. Completion near the disclosed US$1.3 million price, preservation of the 11% initial property yield and subsequent growth in distributable income per unit would establish that the scrip mechanism is financing accretive expansion. A growing asset base accompanied by weaker per-unit distributions would produce a different assessment, irrespective of how many properties Tigere ultimately acquires.

The next results therefore need to be read through acquisition price, net property income, distributable income per unit, dividend per unit and net asset value per unit. Those measures will determine whether the 91.48% scrip election has converted a quarterly distribution into productive acquisition capital or simply exchanged approximately US$917,000 of immediate cash distributions for a larger unit base.

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