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'Real Estate Investment Trust' (REIT) are being established in Pakistan to help develop land and construct buildings for both commercial and residential purposes mainly in the limits of Islamabad/Rawalpindi, Karachi, Lahore, Peshawar and Quetta.
Official sources said that the Security and Exchange Commission of Pakistan (SECP) has finalised draft rules for the setting up of REIT within next few weeks. "We met in Karachi last week and held an important meeting with all the stakeholders with a view to set up this REIT. We would now be holding meetings with the stakeholders in Lahore and Islamabad very shortly after which the REIT will be formally notified", said a senior official of the SECP.
When contacted he said the REIT would be a high profile organisation aimed at greatly removing the growing housing problems by arranging substantial loaning from the commercial banks and other investment companies. "Our public is currently facing many problems in terms of getting inexpensive land and loan on low interest rate to construct their houses and other buildings. But with the establishment of REIT, most of these problems are expected to be solved", he believed. The commercial banks' exposure to housing finance has been increased from 5.0 per cent to 10 per cent of net advances but it is still considered very low.
All the related work, he said, has been completed by the SECP paving the way for early notification of what he termed "the much needed" REIT in major cities of the country. Responding to a question, he said, Real Estate Investment Trust Regulations, 2007 were proposed to be made by the SECP in exercise of the powers conferred by section 282B (2) of the Companies Ordinance, 1984 for the information of all persons likely to be affected thereafter. The Securities and Exchange Commission of Pakistan (SECP) held a day-long consultative session to discuss Real Estate Investment Trusts (REITs) regulations, 2007 in Lahore on Wednesday.
The session was a sequel to the earlier one held in Karachi on August 9, 2007.
The participants of the meeting included prominent lawyers, chartered accountants, real estate developers, constructors, surveyors, valuers, project managers and representatives from the Punjab government.
The SECP Commissioner, Specialised Companies Division, Salman Ali Shaikh opened the consultation by giving a detailed presentation on REITs.
He told the participants that the draft REITs regulations are the products of two years of concerted effort by the commission and the concerned stakeholders.
The SECP commissioner said Pakistan would be the first emerging market to initiate REITs. “The objective of REITs is anchored around the concept to introduce an alternative asset class with the purpose to add depth to the capital market and provide transparency to real estate sector in the form of comprehensive disclosures and accountability through a trust mechanism engrained in the REITs regulations,” he added. staff report
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