Globe Residency REIT – First Listed Developmental REIT at PSX

Globe Residency REIT (GRR) was listed at the Pakistan Stock Exchange today by Arif Habib Dolmen REIT Management Limited at a Gong Ceremony, making it Pakistan’s first listed Developmental Real Estate Investment Trust (REIT). Minister for Finance, Senator Ishaq Dar was the Chief Guest on the occasion.

Arif Habib, Chairman, Arif Habib Dolmen REIT Management and Javedan Corporation, presented the welcome address. He said, “The REIT instrument allows investors a fresh avenue of safe investment. This is also accessible to retail investors through listings.

He further said “REITs ensure fully documented real estate development activities in a transparent manner. REIT has an escrow account concept voluntarily securing customer advances for development as CDC is the Trustee of the Fund. It not only raises financial resources for development but also creates huge job opportunities through construction.

It also contributes taxes to the revenues of the Government. REIT makes conversion of open plots into developed properties adding value in economic activities by over two times of the value of land. Arif Habib Group has so far registered 9 REITs in total with a fund of PKR 110 billion and REITS worth PKR 38 billion will be created in 2023. These together will create construction activity of over PKR 600 billion. We are humbled to have received a positive response to Globe Residency REIT; being the first to list developmental REIT.

Senator Ishaq Dar, Federal Finance Minister, the Chief Guest at the ceremony said, “I am happy to note that the REIT structure guarantees full documentation of Real Estate Development, ensuring transparency. PML-N has always been a promoter of the capital market in Pakistan, and we are working towards steering Pakistan out of this challenging phase. The markets will soon see the results of our efforts which we are certain it will reflect too, creating space for new products and sectors. I congratulate Arif Habib Group on being pioneers of REITs and the listing of Globe Residency REIT.”

Akif Saeed, Chairman, SECP, said, “Globe Residency REIT, is the first developmental REIT to be listed on the Pakistan Stock Exchange and its listing demonstrates the potential of REITs in Pakistan, the promotion of which we have been working on for the past 15 years is now garnering results.”

Dr. Shamshad Akhtar, Chairperson PSX and former governor SBP said on the occasion that she appreciates Arif Habib Group’s efforts to bring new products to the market and play its due role both in the financial and real economic segments.

She emphasized the importance of structured and transparent corporate governance framework, which bring efficiencies to the business. She said real estate is a primary industry that can bring vitality to a large segment of economy. She said that in addition to economic aspects, we should also be mindful of the environmental impacts of our practices. She expressed confidence that REITs could not only invigorate the capital markets but can also bring best operational strategies in the real estate development business.

Farrukh Khan, MD & CEO PSX while addressing the ceremony said, “I congratulate Mr. Arif Habib, Chairman, Arif Habib Dolmen REIT Management Limited at this landmark event where the first listing of a developmental REIT is taking place on the PSX. My sincerest thanks to the Chief Guest, respected Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar and SECP Chairman, Mr. Akif Saeed, for gracing the occasion. Addressing the Finance Minister, Mr. Khan added, “While it is a proud day for us to list GRR on the Stock Exchange today, I would like to highlight that PSX market cap has fallen from a peak $100 billion in 2017 to under $30 billion today, average daily volumes have shrunk from $200 million to approximately $20 million and despite an excellent start in the last fiscal year when eight new companies were listed, the IPOs have completely stopped. We look forward to working with the MoF and SECP to resolve some of the issues that are impacting the market. PSX will continue to be at the forefront in its efforts to revitalise the capital market facilitate all such projects such as today’s listing of Globe Residency REIT in the future as well.”

14 million units, which make up 10% of the total units of the REIT Scheme were offered by Javedan Corporation Limited to the General Public at a price of PKR 10 per unit. Offer for Sale of the REIT Scheme took place on December 14 and 15 and was oversubscribed by 2.77 times. Total size of the Fund is PKR 2.8 billion and Project Cost is expected to be PKR 20 billion.
GRR is a closed ended, Listed Developmental REIT with a limited life of 48 months offering investors the opportunity to become Unit holders of Globe Residency apartments, 9 towers comprising of 1,344 apartments being constructed at Naya Nazimabad, Karachi.

Also present at the ceremony were Presidents of Banks, seniors managements of SECP, PSX, CDC, NCCPL, Asset Management Companies amongst others.