Muhammad Atif Chaudhry
PACRA maintains the rating of TPL REIT Management Company Limited
|Rating Type||REIT Manager Rating|
|Long Term||RM 3+||RM 3+|
The assigned rating recognizes TPL REIT Management Limited's financial risk profile ("TPLRMC" or the "Company") which is supported by the adequate capital structure. The rating reflects TPL-RMC's well-experienced management team and governance framework. The Board comprises seasoned professionals having vast experience in various sectors. The Company has launched its first hybrid Shariah Compliant REIT Fund "TPL REIT Fund I" which comprised of three projects i) Technology Park (commercial office & business hotel) ii) Mangrove (waterfront mid-rise community) and iii) One Hoshang (luxury residences). All projects are located at prime locations in Karachi. TPL-RMC is de-risking the Fund’s projects in three major ways: i) Drawing investors' commitments according to a milestone-based schedule ii) Working with world-acclaimed international and local third-party partners iii) Getting its decisions vetted by the investment committee comprising of independent members. While the land for all three projects have also been acquired and relevant SPV’s are created for each project under the project. TPL-RMC has achieved first close for the REIT Fund at PKR 18.35bln, out of which PKR 14.975bln has been drawn down by the entity till now. TPL- RMC has a strong partner network, which includes Squire & Partners (UK) in the design team and Morgan Lewis as the international legal counsel. During the year 2022, TPLRMC also incorporated a wholly owned subsidiary TPL INVESTMENT MANAGEMENT LIMITED in ADGM which has a 3C license. The Foreign subsidiary is currently in the process of raising investment form Foreign Investors.
Going forward, construction activity is picking up rapidly due to access to finance for both the developer and the buyer. The offering will allow investors to tap into Pakistan’s booming real estate. The PAT of the RMC has increased to ~PKR 233mln during FY22. The profit is attributable to the performance fee and management fee. During FY22, sponsors have injected fresh equity in the Company amounting to PKR 350mln. Equity of the RMC stands at PKR 643mln which is well above the minimum regulatory requirement. The assigned rating reflects TPL RMC's association with a well- established real estate developer and operator ‘TPL Properties, whose wholly owned subsidiary ‘TPL Development Private limited’ is the development adviser to the Fund.
The ratings are dependent upon the company’s ability to sustain its healthy business profile amidst strong competition, herein, effective and prudent management of financial risk indicators remain important. Moreover, upholding of governance framework is vital.
TPL REIT Management Company Limited was incorporated on ‘Oct’ 2018 as a public limited company. It is licensed by the Securities and Exchange Commission of Pakistan to carry out REIT management services under the Non-Banking Finance Companies Regulations, 2008, and REIT Regulations, 2015. The Company is engaged in the launch and management of REITs. The Company is a wholly-owned subsidiary of TPL Properties Limited which is the real estate arm of TPL Corp. TPL Group aims to establish new ventures with industry players who contribute business acumen and best practices. The company’s Board of Directors comprises seven members including three independent directors, three non- executive directors and one executive director. Chairman of the board is not appointed yet. Mr. Ali Asghar is the CEO of the Company. A team of qualified individuals associates him. The Company has launched its first hybrid Shariah Compliant REIT Fund.