PACRA maintains the rating of TPL REIT Management Company Limited

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). As per management representation, the Company under the current macroeconomic environment, the demand for Commercial Office space seems weak as Corporates are delaying their capital expenditures to overcome high inflation and widening interest costs, management entails to revisit the project whereby it is looking to reposition the portfolio. 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. The REIT FUND is operating through an SPV structure where the three SPVs depicting the three projects a) One Hoshang represented by HKC PVT LTD. b) The Mangrove Project represented by NMC PVT LTD and c) The Technology Park represented by TTZ PVT LTD. TPL-RMC has achieved the 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 and the remaining drawn is expected to be completed before the year end 2023. TPL RMC has a strong partner network, which includes Squire & Partners (UK) in the design team and SSH a leading design firm from MENA region. Previously, TPL RMC incorporated a wholly owned subsidiary TPL INVESTMENT MANAGEMENT LIMITED in Abu Dhabi Global Market (ADGM) which has a 3C license. The Foreign subsidiary is currently in the process of raising investment from Foreign Investors. Going forward, the RMC plans to get the REIT FUND I listed in early 2024 on the main board at PSX. The offering will allow investors to tap into Pakistan’s booming real estate. During FY23 the PAT of the RMC has increased to ~PKR 364mln (FY22: ~PKR 233mln). The profit is attributable to the performance fee and management fee. During FY23, sponsors have injected fresh equity in amounting to ~PKR 456mln. Equity of the RMC stood at ~PKR 1,363mln at the end of FY23 (FY22: ~PKR 643mln) which is well above 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.

About the Entity
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. The company’s Board of Directors comprises seven members including three independent directors, three non- executive directors and one executive director. Mr. Ali Asgher is the CEO of the Company. A team of qualified individuals associates him.