June 26, 2019 : The Chairman, Securities and Exchange Commission of Pakistan (SECP) met with a delegation of ISE Towers REIT Management Company Limited (ISE REIT) led by Mr. Zahid Latif Khan, Chairman ISE REIT. The meeting deliberated upon a number of measures for the development of Real Estate Investment Trusts (REITs). These included measures for ease of doing business, reducing cost of doing business, regulatory and taxation reforms etc.
The meeting discussed issues related to cost associated with transfer of property to REIT Scheme, permissible businesses, listing requirements, tax on dividend from REIT Scheme and capital gain tax. The Chairman, Mr. Farrukh Sabzwari welcomed the suggestions of the delegation and assured of the SECP’s full support in addressing practical issues that may hamper the growth of REITs in the country.
The Chairman, SECP also briefed the delegation on the various amendments already introduced in Real Estate Investment Trust Regulations, 2015 focusing on simplified regulatory requirements, unitholder’s protection and industry dynamics. Major amendments in the Regulations, interalia, include the concept of private investors along with eligibility criteria to invest in REIT Scheme, introduction of grace period for mandatory listing, enhancing RMC’s capacity to borrow and issuance of right units. He further highlighted that the basic idea behind the said amendments was to promote ease of doing business and reducing the cost of REIT business. The revamped regulatory framework for REITs is likely to help in providing more conducive regulatory environment for establishment of formal real estate sector in the country coupled with enhanced documentation in the economy.
It is expected that the above amendments in the regulatory framework for REITs would help in promoting formal real estate sector in Pakistan in particular and development of economy in general.
The SECP Chairman also proposed holding of a roundtable in the coming month to engage wider group of stakeholders for seeking proposals for development of real estate investment trust.