PACRA maintains the rating of TPL REIT Management Company Limited

The assigned rating acknowledges TPL REIT Management Company Limited's (TPLRMC) adequate financial risk profile, supported by its adequate capital structure. The rating reflects the Company's well-experienced management team and strong governance framework, with a Board comprising seasoned professionals from diverse sectors. TPLRMC has launched its first hybrid Shariah- Compliant REIT Fund, "TPL REIT Fund I", which includes three key projects: Mangrove: Waterfront mid-rise community, represented by NMC Pvt. Ltd. One Hoshang: Luxury residences, represented by HKC Pvt. Ltd and Technology Park: Commercial office and business hotel, represented by TTZ Pvt. Ltd. The REIT Fund operates through an SPV structure, where each project is represented by a separate SPV. Pakistan's real estate sector in FY24 faced challenges from high interest rates, slow construction, and new budget regulations, including revised property tax and capital gains tax rates. The 2024-25 budget introduced tax rebates for LEED-certified green projects and developer credits for affordable housing. REITs benefit from tax-exempt dividends and reduced corporate tax rates. These reforms aim to drive growth, attract long-term investments, and promote sustainability. Going forward, the real estate landscape will be influenced by the lower expected interest rate trajectory. This evolving environment is likely to create favorable conditions for the commercial real estate market.
. The management also plans to revisit its portfolio by selling one of the REIT Fund's projects,
Technology Park, to optimize returns. The REIT Fund achieved its first close at PKR 18.35bln, fully drawn by June 2024. The fund was successfully listed on the PSX main board in early 2024. During FY24, the Company increased its current investments in its subsidiary to PKR 1bln (from PKR 0.7bln) to secure a foreign investment deal.
During FY24 the top line of the Company plummeted by 40% to PKR 637mln (FY23: 1,052mln) on the back of lowered performance fee resultantly the Proft After Tax declined by 65.5% to PKR 125mln (FY23: PKR 364mln). The equity of the RMC stood at 1,489mln (FY23:~PKR 1,363mln) which is well above the minimum regulatory requirement.
TPLRMC’s strategic initiatives, including portfolio repositioning and securing foreign investments, alongside the robust equity position, position the Company to navigate current market challenges effectively. However, the overall recovery of the real estate sector remains contingent on macroeconomic conditions and policy implementation.
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 in ‘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 five independent directors and two non-executive directors Mr. Jamal Baquaris the CEO of the Company (Pending Regulatory Approval). A team of qualified individuals associates him.