SECP Proposes Reforms to Boost Pakistan’s REIT Sector

The Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to the REIT Regulations, 2022, aimed at attracting investment, broadening investor participation and providing greater flexibility to Real Estate Investment Trust (REIT) schemes.

 

Under the draft amendments, the real estate income and asset thresholds would be reduced from 75% to 65%, allowing REITs greater flexibility in structuring their portfolios. Investment-based REITs would also be permitted to invest in vacant land and plots, subject to regulatory requirements.

 

Other proposed changes include:

 

Group-level trusts and employee funds would be allowed to invest in unlisted REIT schemes.

The borrowing period from sponsors, directors and associated entities would increase from 24 to 36 months.

Rental and investment-based REITs could receive up to a one-year extension for listing in justified cases beyond the control of the RMC.

RMCs could acquire property from government entities through legally binding agreements, subject to SECP conditions.

Greater clarity would be provided for Hybrid REIT Schemes, allowing them to earn and realise rental income during the holding period.

 

SECP Chairman Dr. Kabir Ahmed Sidhu said the reforms are intended to create a more enabling REIT framework, mobilise long-term capital, expand investor participation and unlock the potential of Pakistan’s real estate sector.