The Board of Directors of Dolmen City REIT (DCR) recently announced the declaration and approval of a final cash dividend of PKR 0.50 per unit during their meeting on Tuesday, July 18, 2023. This dividend is in addition to the interim dividends of PKR 1.31 per unit that had already been paid to the unit holders. The REIT Scheme, on a cumulative basis, has yielded a dividend of PKR 1.81 per unit, equivalent to 18.1% for the year ending on June 30, 2023, with the aggregate value of dividends amounting to PKR 4.025 billion. Impressively, the REIT scheme has contributed more than PKR 600 million to the exchequer in the form of taxes.
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Listed on the Pakistan Stock Exchange (PSX) as a closed-end, Shariah-compliant, perpetual Rental REIT Scheme, governed under the REIT Regulations 2022 of the Securities and Exchange Commission of Pakistan (SECP), Dolmen City REIT (DCR) has played a pioneering role in establishing the REIT sector in Pakistan. It has become a viable new investment instrument for consistently generating rental income from some of the finest real estate assets in the country.
DCR’s strong financial results stem from increased income in all categories, cost savings, robust property management, and continuous growth in footfall, making it a preferred destination for shoppers and corporates in Karachi. Both property components of DCR, namely Dolmen City Mall and The Harbour Front (office building), have experienced consistently high occupancy rates.
DCR’s success highlights the effectiveness of REITs as an organizational structure for managing public-scale real estate projects. REITs have the potential to bring several benefits to the economy, such as enhancing government revenues, promoting better housing and infrastructure development, creating employment opportunities for low-skilled workers, and offering small savers exposure to real estate, thereby encouraging savings.
Since its launch in 2015, DCR has remained the highest-rated REIT Scheme each year (RR1 by VIS) for its investment quality. The vision to realize the benefits of REITs led the Securities and Exchange Commission of Pakistan (SECP) to revamp the REIT regulatory framework in 2022. Supportive regulatory frameworks and prudent policies by the SECP, State Bank of Pakistan (SBP), and provincial and federal governments have increased stakeholders’ interest in conducting real estate business under the REIT modality. During FY21-23, more than thirteen (13) REIT Schemes got registered in Pakistan.
For the long-term proliferation of REITs and to highlight Pakistan on the global investment radar, relevant sections of the government need to support REITs, thereby bringing more transparency across the board. The apex regulator, SECP, appears committed to supporting the business environment and economic growth in the country by focusing on the development of a business conducive policy framework and regulations that promote financial inclusion, safeguard investors, and call for greater transparency. Consistency in policies and taxation regimes across the country will further encourage the growth of REITs as an important financial vehicle in Pakistan.
