The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Atif Chaudhry

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PACRA maintains the rating of ISE Towers REIT Management Company Limited

Rating Type Entity
(06-Jan-23 )
(07-Jan-22 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

The assigned rating emanates from ISE Towers REIT Management Company Ltd.'s ("ISE Towers or "The Company") business profile characterized by stable operating revenue and strong customer base. The diversified shareholding pattern of the Company comprises 219 shareholders (Corporates, Banks, DFIs, Insurance Companies, Modarabas, pension funds, and others). The assigned rating incorporates sound corporate governance, an experienced management team, an adequate control environment, and Company's pioneer status in the capital markets. The compliance function ensures adherence to all applicable internal and external rules and regulations. The Company is deriving its core income from its dominating asset "ISE Towers" which is enjoying an almost 100% occupancy level. The multistory building is situated in the prime location of Blue Area, Islamabad. The Company is planning to convert the ISE Towers into REIT Fund. The project has achieved significant progress, in the shape of obtaining requisite approvals under REIT Regulation,2015, and the REIT Fund is likely to be launched in FY23. Although the operating income of the Company increased during the year, however, the overall profitability of the Company decreased on account of share of loss from the subsidiary. The net profit stood at ~PKR 382mln for FY22 (FY21: PKR 513mln). The business risk of the Company is supported by high-profile tenants and economic recoveries. The Company has zero leveraging and its liquidity position remains comfortable. The equity stood at ~PKR 6.41bln at the end-Jun'22 (end-Jun'21: ~PKR 6.25bln).
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.

About the Entity
ISE Towers REIT Management Company Limited was incorporated initially as Islamabad Stock Exchange (Guarantee) limited. On January 11, 2016, ISE changed its name and scope of business and got converted from ISE to a REIT Management Company under the repealed Companies Ordinance, 1984, as a consequence of Securities and Exchange Commission of Pakistan's approval of scheme of integration under the Companies Act, 2017. Consequently, the name and scope of the Company have been changed. The principal activities of the Company are to form, launch and manage Real Estate Investment Trust (REIT) under REIT Regulations, 2015. The overall control of the company vests with an eleven members Board. Board's Chairman, Mr. Zahid Latif Khan has a diversified experience in the capital market spanning over twenty-five years. He is accompanied by a team of experienced management professionals. Mr. Sagheer Mushtaq is the Chief Executive Officer of the Company. He is a member of the Institute of Cost and Management Accountants of Pakistan and a commerce graduate and has over fifteen years of diversified experience in the field of finance, operation, and regulatory compliance.

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.