ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has granted licence to two new Real Estate Investment Trusts (REITs) management companies during 2020, while two applications are in process at the commission.

According to a SECP report (2020), during the period under review, two new REIT management companies (RMCs) were granted license to undertake REIT management services, raising the number of RMCs to seven. The SECP during this period also accorded approval for registration of the country's first developmental REIT Scheme under the REIT Regulations, 2015.

Currently, there is only one rental REIT scheme i.e. Dolmen City REIT, which was launched by Arif Habib Dolmen REIT Management Company Limited and has successfully completed nearly five years of operations.

As of June 30, 2020, the fund size of Dolmen City REIT was Rs48.99 billion.

Short-term and inadequate tax incentives for promotion of documented real estate sector through REITs affecting further interest in this area.

The SECP intends to propose relevant tax reforms to the FBR for proportion of the REITs. However, the SECP in order to support the development of financial sector, reduced the fees for permission to form the NBFC, grant of license to undertake REIT management services and fee for registration of REIT Scheme.

Furthermore, public consultation on amendments to further streamline the REIT Regulations, promote ease of doing business and introduce the concept of Infrastructure REITs is also underway.

The SECP during 2020, also successfully implemented a push-through approach for development of REITs industry through a first of its kind outreach programme entailing one-to-one targeted sessions with stakeholders including businesses, land owners, developers etc.

As part of the programme, the SECP directly approached over 100 potential entrants through targeted sessions with nearly 30 interested stakeholders. Consequently, two new RMC licenses have been granted while two applications for grant of license are in process, the SECP added.

Copyright Business Recorder, 2021