Muhammad Azmat Shaheen
PACRA Maintains REIT Manager Rating of JS Investments Limited | RMR
|REIT Manager Rating
The assigned rating reflects executive profile, sponsor strength and the modest positioning of JS Investments Limited (“JSIL-RMC” or the “Company”) in the competitive asset management industry. The rating incorporates a sound governance framework and satisfactory control infrastructure. The research and investment functions of the company are considered adequate. The Company launched its first-ever Rental REIT Fund "JS Rental REIT (JSRR) in Jun'22 with the objective of investing in REIT projects directly or through SPV to generate income/return for unit holders. The initial fund size of JSRR was PKR 657mln which is expected to rise further. The building under the Fund, called "The Center" is situated at Abdullah Haroon Road, near Zainab Market. The property is in a prime commercial zone of Karachi surrounded by government buildings and corporate offices. The performance of the Fund is measured through the management fee earned from JSIL-RMC. During CY22, the RMC generated a management fee amounting to PKR 3.8mln. The Company’s equity stood at ~PKR 1.3bln at year-end-Mar’23, which is well above the minimum capital requirement. JSIL also has licenses for asset management, private equity, and venture capital to further support the core income. The rating finds comfort in the potential synergies from RMC's association with JS Bank Limited and the established presence of JS Group in the financial sector.
The rating is dependent upon the Company’s ability to sustain its market share and uphold strong investment processes and control environment. Meanwhile, retention of key management, sound governance practices, and consistent performance of funds is critical. Any sustained downturn in fund performance and/or significant loss in market share will impact the rating.
JS Investments Limited was established in 1995 and is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has a strong presence in the financial sector with entities operating in the banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JS Investments possesses licenses for Asset Management, Investment Advisory, Private Equity, Venture Capital, and REIT management. JSIL AMC is currently managing sixteen open-ended funds and two Pension funds with AUMs base of PKR 37.5bln. JSIL’s control vests in the eight-member board of directors including the CEO. There are two independent directors while all other directors except the CEO are non-executive.