LAHORE: Real estate is an important sector for investment and REITs would provide an opportunity to the small investors to become shareholders in real estate and benefit from the real estate upside, said Federal Caretaker Minister for Finance, Dr Salman Shah on Monday.

He was speaking as a chief guest at the launching ceremony of regulatory framework for Real Estate Investment Trusts (REITs) held by the Securities and Exchange Commission of Pakistan (SECP). SECP chairman, commissioners and eminent business leaders were present on the occasion.

Shah said that REITs would give opportunity to general public to pool funds for participation in real estate ownership. “It would also have an overall positive economic impact on our economy,” the minister said adding that such initiatives by the government are part of its investor friendly policies and intend to meet the growing needs of the economy. He said that around the world REITs are seen an important tool for stimulating the growth and development of real estate investment market.

“REIT though new to Pakistan, were introduced over four decades ago. The global REIT market has grown to a total market capitalisation of $764 billion,” Shah said adding that Asia has been called the new REIT tiger. He said that 2007 saw the REIT market across the Asian region experience strong performance, particularly in stock prices, total returns and dividend yields.

The minister was of the view that the REIT would provide an investor-friendly atmosphere. “Philippines and Germany recently adopted a REIT regime whereas Italy is in the process of doing so,” said Shah adding that last month India, issued the draft REIT regulations for public comments.