TPL plans Pakistan's biggest REIT to gain from construction push

A unit of Pakistan's TPL Corp. plans to raise as much as $500 million through a private real estate investment trust, marking one of the largest such fundraisings in the nation's history.

TPL REIT Management Co. is seeking to raise 60% of the targeted funds from foreign investors, 30% from domestic investors and the rest from its parent TPL Properties Ltd., according to Ali Jameel, CEO of TPL Corp. 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, he said.

The REIT is the third to be announced in the country this year-and fourth overallas Prime Minister Imran Khan looks at the construction industry as a catalyst to boost the economic growth. The South Asian nation is giving tax evaders a free pass to invest in construction projects and offering subsidies for low-cost houses, while banks have been asked to increase credit exposure to 5% of the loan portfolio for the industry.

"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," Jameel said in an interview at his office in Karachi. "The offering will give investors an opportunity to tap into Pakistan's booming real estate."

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 highend residential building and a gated seafront communityin Karachi, he said.

TPL Corp., a Pakistani group with businesses including vehicle tracking and insurance, is trying to scale up its realty business. TPL's REIT is the third to be announced this year in the country after a hiatus since the nation's first such in 2015, as regulatory changes led by the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan made it attractive for issuers.

Pakistan's first REIT, which holds rental assets including Karachi's most prominent mall and an office tower, offers a dividend yield of around 12% a year. REITs for a housing project in Karachi were announced in July to raise 8 billion rupees ($48 million) with an expected internal rate of return of more than 30%.

The ECC approved the summary with a direction to exercise due diligence in meeting emergent liabilities and submit utilization report, before the forum, regarding funding support by the government duly verified by the external auditors of the entity.

The committee also directed to engage a world class consultant to meet the financial and operational challenges faced by RHC.

The ECC approved a Technical Supplementary Grant (TSG) in favour of Election Commission of Pakistan, amounting to Rs 215 million, for holding local government elections in Cantonment Boards thereby, enabling the Election Commission of Pakistan to perform its constitutional obligations.

The ECC also accorded approval for a TSG amounting to Rs 50,100 million for extending rupee cover against financing by the Asian Development Bank (ADB) of

US $ 300 million for procurement of COVID-19 vaccine and ancillary goods and services.