PACRA Maintains REIT Manager Rating of JS Investments Limited | RMR | Positive Outlook

The assigned rating JS Investments Limited (“JSIL-RMC” or the “Company”) reflects a highly experienced and skilled team, robust governance framework, strong risk and compliance management, and disciplined and well-structured investment process of the Company. The positive outlook assigned to JS Investments Limited also reflects its sustained growth and the anticipated increase in REIT management fees, driven by the expanded fund size of the rental REIT. The Company's focus on building a technology platform and revenue stability through a diversified product mix, including fee income from CIS, REIT, and SMAs, bodes well for the assigned rating. 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. During the year, the Company added five additional floors (9th–13th) to the rental REIT, increasing the fund size from PKR 791mln to PKR 2.2bln and bringing the total number of floors under the REIT to seven (9th-13th, 19th and 20th). The Tenancy agreements for the newly added floors are currently under negotiation. Meanwhile, the 19th and 20th floors, rented to group companies, boast a strong tenant profile.
As of CY23, the Company earned a management fee of PKR 258mln from the collective investment scheme (CIS) including PKR 7.9mln from Rental REIT Fund (Dec'2022: PKR 173mln including PKR 3.9mln from Rental REIT Fund). During 9MCY24, the Company reported a 100% increase in management fee, reaching PKR 343mln (9MCY23: PKR 171mln). Supported by higher core revenues, realized/unrealized investment gains, and dividend income, profitability rose to PKR 256mln (9MCY23: PKR 117mln). The Company's equity stood at PKR 1.9bln as of 9MCY24 (CY23: PKR 1.7bln). The liquidity position remains comfortable. JS Investments Limited 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 JSIL-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.

About the Entity
JS Investments Limited ("JSIL"), established in 1995, is listed on the Pakistan Stock Exchange. JSIL 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.
JSIL’s control vests in the eight-member Board of Directors including the CEO. There are three independent directors while all other directors except the CEO are non-executive. The segment of the Company has a diverse slate of funds - including conventional, shariah-compliant, exchange traded, pension and REIT schemes. The JSIL AMC had AUMs of PKR 75bln at end of Sep'24. (Sep'23: ~PKR 51bln) and JSIL-RMC had PKR ~2,237mln as of Sep'24 (Sep'23: 736mln). The rating of JS Investment Limited (JSIL) has been upgraded from AM2+ to AM2++ on November 30, 2024.