The Pakistan Credit Rating Agency Limited
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Anam Waqas Ghayour

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PACRA Upgrades Project Grading of Oasis Park Residencia (A project of BRB Properties Builders and Developers)

Rating Type Project Grading
(13-Apr-22 )
(13-Apr-21 )
Action Upgrade Initial
Long Term PG3+ PG3
Short Term - -
Outlook Stable Stable
Rating Watch - -

The grading denotes prospects of execution of the real estate project as per plan and the ability to transfer the possession as per defined terms. The Project “Oasis Park Residencia” is first venture of the BRB Properties started in FY18 and will be completed in June'25 as per agreed terms with Sindh Building Control Authority (SBCA). The company has shown significant progress towards the construction of bungalows with management’s commitment to complete it before the deadline. The business profile of the Project is improving as the Project is gaining attraction from the community. As of March 2022, the Company has already sold 80% of bungalows while the company plans to benefit from price appreciation of the remaining units. The Company is expecting rise in the saleable values, the average price of each bungalow is around PKR 23-27mln. In 1HFY22 the company recorded revenue of PKR ~468mln (FY21: PKR 990mln). FCFO stood at PKR 13mln in absolute terms. The financial risk profile remains subject to mobilization of customer advances. BRB Properties has fully utilized the facility of PKR 500mln from Meezan Bank Ltd under Musharaka agreement at KIBOR plus 250bps. The repayment is due from March 2022 on a quarterly basis. The case relating to tax liability amounting to PKR 25.2mln has been referred to Chairman FBR by the Sindh High Court. The courts interim order of no coercive action against the petitioners holds to continue till the matter is decided by FBR. The land bank left from the residential Project would provide strength to the developer. The corporate structure of the developer is aligned with the assigned grading.
The grading is dependent on management's ability to complete the Project within defined parameters, any material deviation in plan, impacting risk profile of the company, will be negative.

About the Entity
BRB Properties, Builders and Developers is a single member company, owned by Mr. Khawaja Bilal Azam. The principal activity is development and sale of residential and commercial projects. Oasis Park Residencia project is earmarked for the construction of 334 bungalows of 120 sq yards located at main Super highway, District Malir Karachi. The Project site, measuring 24 acre and 11.5 Ghuntas (117,552 square yards) of land and is divided in two division "bungalows and "commercial flats". Mr. Khawaja Bilal Azam is in the business of real estate as an investor since 2000 and is supported by family members being associated as directors in the company. The company has a lean but defined organizational structure. Each function is headed by an experienced resource. The board consists of members from the sponsors family.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.