TPL Corp intends to raise up to $500 million through a real estate investment trust (REIT), reported Bloomberg.
The company’s CEO, Ali Jameel, told Bloomberg News that its subsidiary, TPL REIT Management Co., plans to finance 60 percent of the targeted amount through foreign investment and 30 percent through domestic investment. Its parent company, TPL Properties Ltd., will fund the remaining 10 percent.
This will be the country’s largest REIT to date.
Jameel added that the investment will be used to fund a residential building, a technology park, and a seafront residential community in Karachi.
The company expects to list the REIT both domestically and internationally within three years, and will set a rate of return at 30 percent in local currency.
This is the third REIT that has been announced in Pakistan this year, reflecting a recent pick-up in its construction industry.
Jameel explained that “construction activity is picking up rapidly due to access to finance for both the developer and the buyer, and this is expected to grow exponentially over the next two years,” and added that “the offering will give investors an opportunity to tap into Pakistan’s booming real estate”.
The country’s first set of REITs in six years, called the ‘Silk Islamic Development REIT’ (SIDR), were launched earlier this year.
The Securities and Exchange Commission of Pakistan (SECP) introduced a new public-private partnership model in June 2021, and reformed regulations for REITS in a bid to encourage investment. This has eased entry barriers and reduced regulatory hurdles.