The Securities and Exchange Commission of Pakistan (SECP) has been elected as member of the Management Board of Asian Public Real Estate Association (APREA), which helped the commission in finalising the regulatory framework of Real Estate Investment Trusts (REITs).
The SECP official spokesman Imran Ghaznavi said here on Tuesday that Commissioner SECP Salman Ali Shaikh represented Pakistan in the annual general meeting (AGM) of Aprea held in Seoul, South Korea on April 2. The Aprea's management board consists of 25 members elected annually at the association's AGM. The success in the election is recognition of SECP's efforts as the first emerging market to have launched a modern financial sector product (REITs).
He said that the Aprea is a non-profit trade association that represents the listed real estate sector in Asia-Pacific. The association was formed in June 2005 to represent and raise awareness of Asian public real estate companies on the global property investment market. The association aims at uniting the currently fragmented Asia-Pacific publicly listed real estate sector and to provide strong representation both regionally and globally.
He said that the Aprea assisted significantly in providing jurisdictional research to SECP during the finalisation of the regulatory framework of REITs, which was notified by the commission on January 31, 2008.
Imran said that the commission had introduced two types of REITs schemes, providing opportunity to the general public to pool funds for investment in the real estate sector. The REITs started in 1960s from the US and now REITs are available in 15 countries around the globe. Pakistan is the first country in the emerging markets to introduce REITs.
The REITs in Pakistan are introduced in the form of a trust where the property itself will be vested in the name of the trustee and REIT Management Company (RMC) will look after the real estate on behalf of the unit holders. RMC will have a minimum of 20 percent stake in the scheme and will receive a management fee for provision of their services. People will be allowed to invest through units of the REIT scheme, which will be listed on stock exchange.
The REIT will be a specialised investment vehicle. The development of REITs in Pakistan will ensure enabling fiscal and legal environment, conducive to reduction in transaction cost, simplification of procedure, transparency in real estate transactions and tax incentives for all stakeholders including investors, sponsors and real estate participants, he added.