Tapping govt's favourable view, TPL eyes Pakistan's biggest REIT

In a bid to capitalise on the government's favourable view on the real estate sector, a unit of Pakistan’s TPL Corp is aiming to raise as much as $500 million (Rs83.13 billion) through a private Real Estate Investment Trust (REIT), marking one of the largest such fundraisings in the country's history, reported Bloomberg on Tuesday.

TPL REIT Management Company is aiming to raise 60% of its target from foreign investors, while 30% would come from domestic investors. The remaining amount would be from its parent TPL Properties, according to Ali Jameel, CEO of TPL Corp, added the report.

The hybrid real estate investment trust plans to close the deal by June, and will offer an internal rate of return of more than 30% in local currency, Jameel was quoted as saying.

The company plans to list the REIT within three years in Pakistan and overseas. The funds will be used to finance three real estate projects -- a tech park, a high-end residential building and a gated seafront community -- in Karachi, he added.

The development comes as a major boost for the country’s construction sector that is already seeing a major push through various incentives and tax-breaks by the Imran Khan-led government.

TPL’s REIT is the third to be announced this year after Pakistan saw its first in 2015. A favourable regulatory environment, aided by policy measures by both the Securities and Exchange Commission of Pakistan and the country's central bank, has made it attractive for issuers.

Pakistan to see its first set of developmental REITs

Just last month, Arif Habib Dolmen REIT Management Limited CEO Muhammad Ejaz confirmed to the Business Recorder plans to launch the country's first set of developmental REITs.

"The REIT would be listed within three years," Ejaz had said.