The Securities and Exchange Commission of Pakistan (SECP) has proposed a series of reforms to facilitate the growth of Real Estate Investment Trusts and encourage long-term investment in the country’s real estate market.
Under the proposed reforms, the SECP has suggested reducing the minimum required proportion of income from real estate and related assets from 75% to 65%. It has also proposed extending the maximum loan tenure for financing obtained from sponsors, directors and related entities from 24 months to 36 months.
The regulator is considering allowing an additional one-year period for the listing of rental and investment real estate schemes. It has also proposed allowing real estate schemes to hold vacant land and plots for at least one year.
Another proposed reform would allow specified group trusts and employee funds to invest in unlisted real estate schemes, potentially broadening the investor base for the sector.
The SECP also plans to simplify the process for real estate schemes to acquire properties from government and development authorities.
The SECP chairman said the proposed reforms aim to promote long-term investment and develop a more transparent and organized real estate market. The regulator has invited stakeholders to submit their comments and proposals on the proposed amendments. The feedback will be considered before the reforms are finalized.