Regulated real estate investment trusts growth hinges on transparency, tax reforms, SECP told

ISLAMABAD: At an SECP Talk Series session, speakers emphasized that regulated real estate investment trusts (REITs) hold potential to formalize Pakistan's property sector and connect it to capital markets. However, they stressed that REIT growth is contingent upon transparent valuations, robust governance, and simplified tax rules.

SECP Commissioner Imtiaz Haider highlighted REITs' capacity to mobilize private investment for crucial infrastructure projects, such as motorways, bridges, energy parks, and logistics hubs. He also proposed leveraging existing public assets and financing development initiatives through REITs. As of March 2026, 29 REIT schemes had been registered in Pakistan, with a combined fund size of Rs173.1 billion.

Globally, as of the end of 2024, there were 1,021 listed REITs with a combined market capitalization of $2.04 trillion. Zahid Latif Khan, Chairman of ISE REIT Management Company Ltd, presented the global REIT landscape and showcased the Rs5.67bn ISE Towers Rental REIT as a local case study. He further outlined potential REIT opportunities in Islamabad and Rawalpindi, including rental, developmental, hybrid, and parking REITs.

Speakers reiterated that REIT returns and liquidity are not assured and depend on the underlying assets, scheme structure, and prevailing market conditions. Essential elements to foster confidence in REITs include independent valuation, trustee oversight, clear disclosures, and investor education. Muhammad Ejaz, CEO of Dolmen REIT Management Ltd, showcased Dolmen City REIT and Globe Residency REIT as local examples.

Dolmen City REIT's market capitalization stood at Rs86.88bn as of September 30, with occupancy exceeding 97% at both properties. Ejaz advocated for rationalizing property transfer duties and taxes and reviewing investment limits to stimulate sector growth.