After Pakistan’s first Development Real Estate Investment Trust (REIT) begins issuing units for subscription on the Pakistan Stock Exchange (PSX) this week, a significant shift in the country’s real estate sector is anticipated.
Muhammed Ejaz, the CEO of Arif Habib Dolmen REIT Management Limited (AHDRML), told that the REIT’s public offering on Wednesday will effectively herald the start of the end of real estate speculation. In addition, he predicted that within the next five years the whole industry will switch to the REIT model.
The CEO stated that although Pakistan’s real estate industry has long been regarded as profitable, access to it is restricted to major investors, and liquidity is a significant problem. Property ownership may be split up into manageable portions using REIT.
“If you buy a plot worth Rs. 50 million and need Rs. 1 million, you can’t just take it out. The lack of liquidity and size made the real estate market inaccessible to the average person. The conversion to REITs was used to solve this problem,” he said.
The CEO added that because there is greater transparency, responsibility, and discipline while operating in the REIT mode, financiers are more at ease. The choice of an escrow arrangement and the fact that assets are managed by a trustee like the Central Depository Company (CDC), which also performs comprehensive monitoring, put investors at rest.
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