SECP Proposes Enhancement in Scope of REITs

SECP has proposed to enhance the scope of the Real Estate Investment Trusts (REITs) assets in Pakistan covering agriculture, healthcare, transport, power/energy, and telecommunication. Under the existing regime, at least seven different approvals are required, making REITs less competitive.

The purpose of proposed regulatory amendments is to introduce new REIT products, create ease for REIT Management Companies (RMCs) in launching different REIT schemes and shift towards a reporting-based regime.

A new category of REIT scheme titled ‘Investment based REIT Scheme’ has been proposed. Under the proposed scheme, the RMC would only act as an investment firm instead of a developer. A pool of funds can be invested in units of different real estate projects generating rental income.

The SECP has introduced certain regulatory reforms relating to REIT(s) function over the last couple of years.