SECP proposes key reforms to boost REITs

September 10, 2026 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has proposed a set of key reforms aimed at promoting Real Estate Investment Trusts (REITs), easing investment restrictions and creating greater flexibility for real estate schemes.

Under the proposed amendments, the SECP has suggested reducing the minimum proportion of income from real estate and related assets from 75% to 65%, potentially providing REIT schemes greater flexibility in managing their portfolios.

The regulator has also proposed extending the maximum tenure of loans obtained from sponsors, directors and related entities from 24 months to 36 months.

For rental and investment real estate schemes, the SECP is considering an additional one-year period for listing, giving schemes more time to meet listing requirements.

The proposed reforms would also allow real estate schemes to hold vacant land and plots for at least one year, providing greater flexibility during the development and investment cycle.

The SECP is further considering allowing specified group trusts and employee funds to invest in unlisted real estate schemes, potentially broadening the domestic investor base for the sector.

The regulator has also proposed simplifying the process for REIT schemes to acquire properties from government and development authorities.

According to the SECP, the proposed reforms are aimed at encouraging long-term investment, improving market transparency and strengthening the real estate investment ecosystem.

The proposed amendments seek to facilitate RMCs by allowing an extension of up to one year for listing of Rental and Investment-based REITs in justified cases where delays arise from circumstances beyond RMC’s control.

Furthermore, the proposed amendments also seek to facilitate RMCs in acquiring property from government entities through legally binding agreements, subject to conditions specified by SECP, to accommodate procedural constraints.

Moreover, to provide regulatory clarity, a proposed provision has been notified clarifying that Hybrid REIT Schemes combining Investment-based and Rental REIT components may earn and realize rental income from their real estate during the holding period.

Chairman SECP Dr. Kabir Ahmed Sidhu said, “These reforms are aimed at creating a more enabling REIT framework that can mobilize long-term capital, broaden investor participation and unlock greater potential in Pakistan’s real estate sector.”

The commission has invited stakeholders to submit their comments and recommendations on the proposed amendments before finalising the regulatory framework.

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