PACRA maintains the rating of Zameen REIT Management Company Limited

The assigned rating for Zameen REIT Management Company Limited ("Zameen RMC" or the "Company") reflects the presence of an experienced management team and an emerging brand name in real estate development. Zameen RMC is the wholly-owned subsidiary of Zameen Developments (Private) Limited which is the associated company of Zameen Media (Private) Limited ("Zameen Media"). Zameen Media originally focused on the classifieds sector but expanded into developmental activities in 2017 through its associated company, Zameen Developments. This strategic backward integration strengthens its group structure, as Zameen Media and its affiliated companies now operate in both the classifieds and development sectors in Pakistan. The rating is also supported by the backing of ZTech Holdings Limited (ZTech"), the holding company. ZTech is the associated company of Dubizzle Group Holdings Limited. Pakistan's real estate sector faces challenges in FY24, with property values adjusting amid high interest rates and slow progress in construction projects, some of which are on hold. The 2024-25 budget introduced new regulations, including revised property tax rates and changes to capital gains tax, aimed at expanding the tax base and revenue, potentially delaying the sector's recovery. While these hurdles persist, they also create opportunities for market stabilization. The plummeting inflationary pressures and monetary easing may create liquidity for new investments. Zameen RMC had also planned to launch its developmental REIT Fund but postponed the initiative due to new tax implications on property transfers to REIT funds, leading to the withdrawal of the fund's rating. Moving forward, the Company intends to introduce new development REITs in the near future.
The rating watch is capturing the withdrawal of the existing REIT Scheme. The assigned rating is largely contingent upon the Company's ability to successfully launch the upcoming REIT projects. The completion of the projects will be imperative for maintaining this rating.
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About the Entity
Zameen REIT Management Company Limited, a wholly-owned subsidiary of Zameen Developments (Private) Limited, was established as a public limited company on March 1, 2023, under the Companies Act, 2017. It received its license from the Securities and Exchange Commission of Pakistan (SECP) on May 16, 2023, to operate as a Non-Banking Finance Company (NBFC) providing REIT Management Services. The Company's Board of Directors comprises of seven experienced professionals including Adil Ahmad Kamal (CEO), Zeeshan Ali Khan, Mariam Saleem, Maryam Haq, Tanzain Shafqat as the Non-executive directors and Sadiq Ali, Kamran Nasir as the Independent Directors.