PACRA Assigns Initial REIT Manager Rating to Mukab REIT Management Company Limited

The assigned rating reflects Mukab REIT Management Company Limited's ("RMC" or the "Company") adequate capital structure, experienced sponsor profile, and adequate governance structure. Mukab REIT is backed by the Falaknaz family, which carries over five decades of experience in real estate development and has successfully delivered more than 50 projects across Karachi and Islamabad, spanning affordable to premium segments. The RMC has been established as a professionally managed and transparent real estate investment platform to transition traditional, family-owned real estate development activities into a regulated REIT framework. The structure is aimed at enhancing governance visibility, investor confidence, and long-term scalability while providing retail investors access to real estate investments. The RMC is in the process of launching its first fund, the "Mukab Falaknaz REIT Fund", with an expected fund size of PKR 7.5 billion. The fund would be comprised of two projects, i) Falak Naz 9th Avenue and ii) Falaknaz Tiara in Jinnah Avenue, Karachi, and DHA VII, Korangi, Karachi, respectively. Both projects are located in Karachi. All major pre-construction requirements, including land payments, title clarity, zoning approvals, and NOCs, have been completed. Construction activities are expected to commence shortly following the completion of the remaining procedural formalities. The `strategic investor is expected to retain approximately 50% unit holding, while the remaining portion is planned to be raised from financial institutions, high-net-worth individuals, and private investors, supporting a gradual transition toward a broader investor-owned structure. The proposed Development REIT will initially focus on a mixed-use project, comprising commercial space at the ground level and residential units on the upper floors. The development model is expected to diversify income streams through rentals and sales, thereby improving the overall risk-return profile. Sponsor strength remains an important consideration in the assessment.
From a financial perspective, the Company remains at an early stage of operations, with initial losses reflecting start-up and administrative expenses typical of newly incorporated management entities. However, financial projections indicate a marked improvement in the Company’s earnings profile from FY26 onwards, supported by scaling management fee income, strengthening liquidity, and a growing equity base.
The assigned rating incorporates Mukab REIT’s experienced sponsor backing, planned asset induction pipeline, and improving governance structure, balanced against the execution risks inherent in development-stage projects and the need for timely capital deployment.

About the Entity
Mukab REIT Management Company Limited was incorporated on November 5, 2024, as a public limited company. It is licensed by the Securities and Exchange Commission of Pakistan (SECP) to undertake REIT management services in accordance with the Non-Banking Finance Companies Regulations, 2008, and the REIT Regulations, 2015.
The RMC is associated with the Falaknaz Group, a Karachi-based, family-owned business led by its founder, Mr. Sheikh Ilyas, and comprising four sons, Muhammad Riaz, Muhammad Aqeel, Fayyaz Ilyas, and Sheikh Shakeel Ilyas. The Company is primarily owned by Mr. Sheikh Shakeel Ilyas, with the remaining shareholding held by Mr. Adeel Shahzad, Mr. Ovais Suhail, and Mr. Shahbaz Mukhtar. Mr. Sheikh Shakeel Ilyas’s association with the Falaknaz Group brings valuable business expertise and well-established best practices to the Company.
The Company’s Board of Directors consists of seven members, including two independent directors. The Chairman, Mr. Shakeel Ilyas, in addition to this role, serves on the boards of several other organizations. Currently, the Company is in the process of launching its first REIT fund, namely the Mukab Falaknaz REIT Fund.