In a major development for the real estate sector, TPL Properties Limited (TPLP) Wednesday announced that the Securities and Exchange Commission of Pakistan (SECP) has given its nod for selling the company’s developmental assets to its wholly-owned subsidiary, TPL REIT Management Company Limited, paving way for the REIT to raise Rs80 billion funding.
TPL Properties in a filing to the Pakistan Stock Exchange (PSX) stated: “We are pleased to announce that the Securities and Exchange Commission of Pakistan, by way of its Consent Letter dated, November 30, 2021, in terms of Regulation 3(c) of the REIT Regulations 2015, has accorded its approval to TPL REIT Management Company Limited… for the registration of the proposed trust deed “TPL REIT Fund I” under the Sindh Trust Act, 2020.”
Under the proposed deed, an initial fund size of Rs18.35 billion will be raised from local investors and ultimately, the target fund size of Rs80 billion will be raised from local and international investors, informed TPL Properties.
“The company shall now get the trust deed registered under the Sindh Trust Act, 2020 and subsequently get the REIT scheme registered with the SECP,” it added.
Back in September, TPL Properties informed its stakeholders that its Board of Directors have given approval for selling “its developmental assets either directly or through SPVs to the REIT Fund to be managed by TPL REIT Management Company Limited and act as a Strategic Investor in the Fund”.
TPL REIT Management Company plans to raise Rs80 billion through 60% of its target from foreign investors, while 30% would come from domestic investorsm. The remaining amount would be from its parent TPL Properties, Ali Jameel, CEO of TPL Corp, told Bloomberg in August.
The hybrid real estate investment trust plans to close the deal by June next year, and will offer an internal rate of return of more than 30% in local currency.
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, Jameel told the news agency.