Pakistan’s REIT Sector Set For Wider Investment Under SECP Reforms.
✧ GENERATE BRIEFING +
The Securities and Exchange Commission of Pakistan (SECP) has unveiled a comprehensive package of amendments to the REIT Regulations, 2022, designed to modernize Pakistan's real estate investment trust sector and mobilize long-term domestic and foreign capital. Spearheaded by SECP Chairman Dr. Kabir Ahmed Sidhu, the proposed framework introduces critical structural flexibilities—such as lowering the minimum real estate income and asset holding thresholds from 75% to 65%—to broaden eligible investment projects. Additionally, the reforms permit investment-based REITs to deploy capital into vacant land and plots, while opening unlisted REIT schemes to institutional participation from group-level trusts and employee provident funds.To alleviate operational bottlenecks, the draft regulations extend sponsor borrowing windows from 24 to 36 months, grant RMCs up to a one-year listing extension for unavoidable delays, and introduce streamlined pathways for acquiring government-owned properties via legally binding agreements.
The Securities and Exchange Commission of Pakistan (SECP) has proposed amendments to the REIT Regulations, 2022, aimed at attracting long-term capital, widening investor participation and giving greater flexibility to real estate investment trusts in Pakistan.
Under the proposed framework, the SECP plans to reduce the minimum real estate income and asset thresholds from 75% to 65%. The change would allow REITs greater flexibility in structuring their portfolios and broaden the range of projects eligible for investment.
The proposed reforms would also allow investment-based REITs to invest in vacant land and plots, subject to applicable regulatory requirements. The move is intended to expand investment opportunities within the real estate market.
The regulator has proposed allowing group-level trusts and employee funds to invest in unlisted REIT schemes, potentially widening the pool of institutional and employee-linked investors. The borrowing period from sponsors, directors and associated entities would also increase from 24 to 36 months, while existing unitholder approval requirements would remain in place.
For REIT Management Companies (RMCs), the amendments would allow an extension of up to one year for listing Rental and Investment-based REITs where delays result from circumstances beyond the RMC’s control.
The SECP also proposes allowing RMCs to acquire property from government entities through legally binding agreements, subject to conditions specified by the regulator. This is intended to address procedural delays associated with government-owned properties.
Another proposed change would provide regulatory clarity for Hybrid REIT Schemes, allowing schemes combining investment-based and rental components to earn and realise rental income from their real estate during the holding period.
SECP Chairman Dr Kabir Ahmed Sidhu said the reforms are intended to create a more enabling REIT framework capable of mobilising long-term capital, increasing investor participation and unlocking the potential of Pakistan’s real estate sector. The draft amendments have been placed for public consultation before finalisation.
