Adding Real Estate to Corporate Investment Portfolio


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Introduction

Companies and organisations are constantly looking for ways to increase efficiency and maximise profitability. Utilising assets and capital in the corporate sector requires a firm’s management to invest it in ways that would generate the highest wealth for the company’s shareholders. With real estate becoming a big part of the institutional and retail investment portfolio, growth in products like real estate investment trusts (REITs) and real estate mutual funds are providing business managers with high enough incentives to invest in real estate (Gill, 2014). Due to the capital-intensive nature of real estate investing and its high requirement for asset management, growing real estate opportunities are making organisations look into real estate funds (Chen, 2020). The retail investor is also open to a much larger selection of real estate mutual funds allowing for efficient capital flow and portfolio diversification. Therefore, real estate must be considered an important part of an organisation’s investment portfolio. Continue reading to understand how the corporate sector can include real estate in its investment portfolio.

Research Questions

Why should corporate and retail investors invest in real estate?

What are the barriers to investing in real estate?

What strategies can be used by corporate and retail investors for investing in real estate?

Understanding the Barriers to Real Estate Investing

The real estate investment landscape has a large portion of pension funds, insurance companies, and other big financial institutions. In the aftermath of globalisation, real estate has become a far more accessible asset class, which allows for greater diversification of stakeholders in the arena. It can be seen that more and more companies are adding real estate to their investment portfolios. However, allocating funds towards real estate can have its challenges. Firstly, it is a very capital-intensive venture compared to the stock market, which can be purchased in small quantities and tends to be very liquid (Forbes, 2020). Commercial and residential real estate requires substantial upfront deposits, whereas direct investments in these two can be lumpy and illiquid based on location, risk, and property type. Secondly, real estate investment portfolios require active management and maintenance. This process can be costly, and compared to managing traditional investments, managing a real estate mutual fund requires significant resources, expertise, and planning. Due to these issues, institutions have started to gravitate towards real estate mutual funds and funds of funds (FOF). Private investors also can invest in real estate investment trusts that provide the much-needed liquidity and exemption from state taxes on profits. These funds can also be exchanged using exchange-traded funds (ETFs) (Frankel, 2020).

Corporate and Private Sector Strategies for Investing in Real Estate

There are multiple strategies that corporate and private sector investors can employ for investing in real estate. Direct investment strategy involves directly purchasing selected properties as investments. This can include properties that generate rental income or can be based on an increase in market value. The advantage of employing this strategy is having control and direct ownership of the property, which allows for the development and execution of personal strategies. However, as direct investments are restricted by investment capacities, it becomes exceedingly difficult to create a well-diversified real estate portfolio. Furthermore, it also involves additional costs such as landlord costs, risks, and management tasks (Formigle, 2016).

Another strategy that retail investors can employ is called homeownership. Many investors already own a home and have substantial exposure in the market. However, the method involves taking on additional risks in terms of a home mortgage. This can also be beneficial as it allows for amassing capital for further investments by building a strong credit rating. Real estate investment trusts (REITs) are another investment strategy that represents private and public equity in companies structured as trusts that invest in real estate, mortgages, or other collateral. REITs own, operate, and manage properties which can include multifamily residential properties, shopping centres, local retail properties, malls, commercial spaces, offices, and hotels. REITs are also run by managers that take decisions on behalf of the trust. They provide strategic vision and make property-related decisions, removing the burden from the investor (Nareit, 2021).

Furthermore, another option for corporate and retail investors is to invest in real estate mutual funds and funds of funds. Real estate mutual funds invest in REITs and other real estate operating companies using professional portfolio managers and expert researchers. They allow for a diverse investment portfolio with a relatively small amount of capital. Along with this, they also provide mobility in moving from one fund to another with relative ease. This flexibility is also important because a mutual fund investor can acquire and dispose of assets on a systematic and regulated exchange instead of direct investing, which has many additional costs involved. Analytical research information provided by funds on acquiring the asset can also be helpful for the investor in making decisions for future ventures. Subsequently, a fund of funds (FOF) is a multi-manager investment that invests in other funds. Its portfolio contains different underlying investments that directly replace investments in stocks, bonds, and other securities.

Conclusion

Purchasing a real estate asset is only half the process of making a profit on an investment. Once a property has been purchased, it needs to be stabilised according to market conditions for it to sell at a higher price. Construction and restoration are two main processes used to enhance a property, after which it needs to be stabilised. Stabilisation includes getting tenants on a property, getting the right market rent, getting the right occupancy levels, and factoring in other key performance indicators for properties. Once the property has been stabilised, it needs to be listed on an online property portal or with real estate agents or brokers. Exiting is the last stage of an investment and is often related to making the sale and evaluating the key investment indicators such as internal rate of return and net profit income. Following this four-step strategy covered in our blog series can ensure a safe and reliable investment method for investing in real estate.

Key Takeaways

  • Utilising assets and capital in the corporate sector requires a firm’s management to invest it in ways that would generate the highest wealth for the company’s shareholders.
  • With real estate becoming a big part of institutional and retail investment portfolios, growth in products like real estate investment trusts (REITs) and real estate mutual funds are providing business managers with high enough incentives to invest in real estate.
  • The retail investor is open to a much larger selection of real estate mutual funds allowing for efficient capital flow and portfolio diversification.
  • Real estate investment landscape has a large portion of corporate organisations like pension funds, insurance companies, and other big financial institutions.
  • In the aftermath of globalisation, real estate has become a far more accessible class of asset, and this allows for greater diversification of stakeholders in the arena.
  • Real estate is a very capital-intensive venture compared to the stock market, which can be purchased in small quantities and tends to be very liquid.
  • Real estate investment portfolios require active management and maintenance.  

Bibliography

Chen, J. (2020). Fund Of Funds (FOF). Retrieved from https://www.investopedia.com/terms/f/fundsoffunds.asp

Forbes. (2020). Is It Just A Myth That Real Estate Is A Better Investment Than Stocks? Retrieved from https://www.forbes.com/sites/kristinmckenna/2020/02/21/is-it-just-a-myth-that-real-estate-is-a-better-investment-than-stocks/?sh=1c3ae90c1808

Formigle, I. (2016). What are the Differences Between Direct and Indirect (REIT) Real Estate Investments? Retrieved from https://www.crowdstreet.com/resources/topics/investing/direct-indirect-investing

Frankel, M. (2020). REITs vs. Real Estate Mutual Funds: Which Is the Best Way for You to Invest? Retrieved from https://www.millionacres.com/real-estate-investing/reits/reits-vs-real-estate-mutual-funds-which-is-the-best-way-for-you-to-invest/

Gill, S. W. (2014). Alternative Investments. Retrieved from https://www.cfainstitute.org/-/media/documents/support/programs/investment-foundations/12-alternative-investments.ashx

Nareit. (2021). What’s a REIT (Real Estate Investment Trust)? Retrieved from https://www.reit.com/what-reit#:~:text=REITs%2C%20or%20real%20estate%20investment,number%20of%20benefits%20to%20investors.

 

 

 




Plots vs Houses: Which one is a better option? | Graana.com Blog


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Real estate is considered to be one of the most common and most practiced investment opportunities in Pakistan. A massive chunk of Pakistanis invest in real estate every year and for all the right reasons. 

Real estate comes with tons of tangible and intangible advantages. For example, real estate safeguards your hard-earned money, gives you good returns, provides appreciation on the asset, and an opportunity to grow your money in the long run.

There are many types of real estate projects readily available in Pakistan. However, people usually prefer investing in houses or plots. If you are about to invest in real estate but are unsure about where to invest, this blog might help you out.

In this blog, we bring you a detailed comparative analysis between houses and plots so that you can make a better and well-informed decision about your real estate investment.

So, let us get started.

Pros and cons of buying a house:

Following are some of the pros of buying a house in Pakistan. Give this list a read and make a well-informed decision. 

Multiple uses: 

A plot is a piece of land that has lesser uses as compared to houses. On the other hand, a house is a tangible asset that you can use for multiple things. 

For example, you can rent out your home, use it as your residence, and use it to earn a passive income by listing your house for online platforms such as Airbnb and couch surfing. If you want to develop a passive source of income, you should invest in a house.

Long term investment:

A house is an excellent long-term investment. It not only yields good monthly returns, but it can also pay off well in the future when its price appreciates. So, if you are looking for a source that will safeguard your hard-earned money in the long run, you should buy a house in Pakistan.

Cons of owning a house:

Like everything else in this world, buying a house can also lead to some disadvantages. For instance:

Maintainance costs:

Owning a house comes with many advantages, but you cannot ignore the fact that owning a home can be heavy on the pocket. First of all, when you buy a house, you have to incur any maintenance costs.

 For instance, a house needs regular paints, new fixtures, and minor changes here and there. All these things come with a price which the owner has to incur himself. 

Houses appreciate gradually:

As compared to plots, the value of houses appreciates slowly and gradually. Usually, the exterior of the homes deteriorates over time and may result in a decrease in the house’s value. Also, it is seen that houses depreciate 

Utility bills:

When you buy a house, it comes with different utilities such as electricity, gas, and water. The government owns all these utilities, and one has to pay money to avail of these services. 

Even if your monthly house utility bills seem to be less every month, the costs will accumulate and look more prominent every year. If you are low on budget, utility bills can be another high cost of owning a house.

Difficult to manage:

Unlike plots, houses are difficult to manage. If you live in the same place, the management can be relatively more accessible for you, but if you reside somewhere else and own another house, things might get difficult for you.

If you want to keep your house relevant to the real estate market, you need to manage it strategically. Clean it, renovate it, add minor improvements in the place, which may increase its value. 

Pros and cons of owning a plot:

Just like buying a house comes with its own set of pros and cons, having a plot has its advantages and disadvantages. To know more about these pointers, keep reading.

Pros of owning a plot:

A plot comes with many advantages. Some of the major advantages include:

Short term investment:

Plots are perfect examples of short-term investment. If you are a new investor who wants to invest in assets that yield good money in a short duration of time, plots are perfect for you. The plot buying and selling are very, very rigorous in Pakistan, and people usually buy and sell plots fastly in Pakistan.

Low maintenance:

Unlike houses, plots come with low maintenance. You don’t have to pay for utility and maintenance costs for a plot. Hence, it is quite effortless to manage a plot in Pakistan. You just have to buy a plot and leave it as a source of investment. 

Less costly:

As we have discussed above, plots come with no or minimal maintenance costs. Therefore, the absence of utility bills and other indirect expenses saves much money in the long run. 

Freedom to construct:

Plots come with a lot of flexibility and freedom of construction. But, unfortunately, you do not find such flexibility while buying a house in Pakistan. However, a plot comes with much space to design and construct any building according to his needs and preferences. 

Easy to sell:

Plots are relatively easier to sell because plots are always high in demand. There are a lot of residential, commercial, and industrial projects in Pakistan. These projects and real estate developments increase the demand for plots in Pakistan. Unlike houses, the appreciation of plots is significant, and you can get good money out of your investment.

Also, plots come with greater appreciation owing to their continuous demand.

Less investment cost:

You can get ownership of a plot with less capital. For example, when you buy a house or build a home, you have to invest a relatively higher amount of money. On the other hand, a plot comes with lesser capital requirements. 

Resale value:

Plots have more excellent resale value. Owners of houses have to wait longer as compared to people who are selling plots. The main reason behind this noticeable delay is that people have different tastes and expectations with an already made house. When they do not like the house, they move on to the next option. This is not the case with plots due to their high flexibility and ease of construction.

Encroachment:

According to Investopedia, Encroachment occurs when a property owner trespasses onto their neighbor’s property by building or extending structures beyond their property line. Boundaries and property lines can be cleared up by getting a land survey.

Encroachment of land is widespread in Pakistan. People go beyond their limits and illegally occupy the land of other people. 

Financing limitations:

Usually, banks do not provide easy loans on plots. On the other hand, people get more financing opportunities to buy a house or build a house. There are many banks and financial institutions that provide easy to return loans to Pakistani citizens.

These are some of the pros and cons associated with land and houses. However, we would like to mention that both real estate products are effective and yield good returns. The final decision depends on your personal preferences and budget. 

If you have any questions or queries related to this comparison, leave us a comment in the comment section below, and we will get back to you as soon as possible.




Ravi City to direct foreign investment in country


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LAHORE: Imran Amin, Chairman Ravi Urban Development Authority (RUDA) while expressing his views in a programme has informed that the Ravi City project will direct foreign investment in the country.

The chairman was of the view that the city will be developed over 100,000 acres of land and the development work will start in the upcoming two to three months.

Furthermore, the chairman also informed that foreign investors will be invited to invest in the first phase of the city and the project will be completed in the given period of time.

Under the infrastructure development, the chairman informed that three water treatment plants have already been approved for the city whereas various bridges will be developed for connecting the old city with the new city.

 

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Real Estate Investment Avenues

There are numerous benefits of investing in real estate. From predictability in cash flows to excellent returns, tax advantages, and diversification, real estate is one of the most profitable ways of building wealth (Chen & Scott, 2021). There are many ways through which an investor can make money from real estate. Rental incomes, appreciations, and profits generated by business activity on the property are the most significant sources of generating profits. The benefits of investing in real estate include the generation of passive income, stable cash flows, and leverage (Yale, 2021). There are also ways to invest in real estate without owning, operating, or having to finance properties using real estate investment trusts (REITs). Investments in real estate based on loans are also beneficial as the cash flow and net income after expenses increase over time as loan payments are reduced. Continue reading to understand the different approaches to making investments in the real estate sector.

People usually invest in stocks, bonds, and other assets, but investments in real estate have many additional benefits which have always made them a lucrative option. Investors in real estate make income by rentals, business activities based on the property, and appreciation over time. Land usually appreciates over time and is positively affected by developments in urban infrastructure. Rentals also increase every year allowing for a significant cash flow to be generated. Investors in real estate can also take advantage of tax breaks as loans mature over longer periods and the owner can deduct reasonable costs from his earnings such as owning, operating, and managing a property. Moreover, as one pays off his loan towards a real estate investment, it helps grow the individual in equity which can further be used to purchase more real estate. There are also many options for investing in real estate that offer diversification of the investment portfolio. Almost all assets are affected by inflation, but real estate is considered the most powerful hedge against inflation. Real estate maintains the buying power of the capital as growth in the GDP also drives more business activity and demand for real estate. Therefore, investing in real estate is among the best investment options.

Investing in real estate is satisfying and profitable. Unlike stocks and bonds, people have the option to invest in real estate by paying a small upfront cost and paying the remaining amount later. This takes us to the first way of investing in real estate. Traditional mortgages only require a 20 to 25 percent down payment for legally purchasing a property, whereas in some cases it may be as low as 5 percent. This makes the purchaser a landlord of a rental property that can be leased to pay off the mortgage and cost by simply signing on a document and paying a small upfront cost. After completion of the mortgage period, the income generated from rentals can become the profit of the owner with considerable cash flows. The option is great for maximising capital through leverage; however, it can also be a tedious task to manage tenants (Beattie, 2021).

Another investment option for real estate investors is to invest in real estate investment groups (REIGs). This option is more considerable for people who want to invest in rental real estate without having to manage the property themselves. REIGs are small mutual funds that invest in rental properties and allow multiple investors to buy stakes in a single property. It is usually a company that operates the investment group and manages all the units, maintenance, vacancies, and tenants. Although it is a more hands-off experience than managing properties personally, there are vacancy risks, fees for the company offering managing services, and susceptibility to bad management that can harm potential profits (Robbins, 2021).

The third method of investing in real estate is called property flipping. The method is suitable for people with significant experience in property valuation. Renovation and marketing skills are also required for successfully flipping properties. Those who invest in property flipping are mostly different types of investors than those who buy and rent. The main goal is to sell an undervalued property profitably within six months. They do not look to invest in improving properties, and therefore, the property needs to have the potential of increasing in value without making major alterations to it. Properties that are bought with renovation in mind are mostly longer projects and can be riskier to sell. The method offers quick returns and ties up capital for a shorter period. However, a deeper knowledge of the market is required in this method (Stammers, 2021).

The fourth method is investing in real estate investment trusts (REITs). The method is best for those investors who want real estate in their investment portfolio without conducting a real estate transaction. It is a trust that uses investor’s money to purchase and operate income-generating properties. The difference between REIGs and REITs is that REITs are sold on major exchanges like any other stock. To qualify as a REIT, a company must pay around 90 percent of the taxable profits to investors as dividends. Therefore, they do not pay a corporate tax like regular companies who would have had their income taxed before being disbursed as dividends to investors. More importantly, unlike normal real estate investments, REITs are very liquid and can be exchange-traded. REITs also differ based on what type of real estate they work on. Mortgage-backed REITs and equity-backed REITs are the two major types (Nareit, 2021).

The last method is investing in online real estate platforms. These platforms offer the ability for a large number of people to invest in a bigger commercial or residential deal. The investment takes place on an online platform and is also called real estate crowdfunding. It requires significantly less capital than purchasing properties outright and investors are linked with developers who are looking to finance projects. The method gives the option to invest in a single project or have a diverse portfolio of investments. Geographical diversification can also be achieved as developers from various areas can offer projects on the same platform. However, the investments are mostly illiquid with lockup periods on purchases, and online platforms have to offer higher management fees for their managers (Plainfinances, 2021).

Investments in real estate can be among the most profitable sources of income and wealth generation. From predictability in cash flows to excellent returns, real estate is fast becoming the favourite investment choice of millions of investors around the world. There are many ways to invest in real estate. Rental incomes, real estate investment groups (REIGs), property flipping, real estate investment trusts (REITs), and online real estate platforms are among the most popular methods of investing in real estate. Each method will be suitable to different types of investors, and therefore, a wide range of investors can consider real estate while diversifying their portfolios.



Lahore Smart City: Features, Investment Plan and More | Graana.com Blog


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Ever since the advancement in technology, peoples’ lifestyle demands and living standards have skyrocketed. And to reach that standard, Habib Rafiq Pvt Ltd and FDH are soon set to launch Lahore Smart City in Lahore. 

It’s not just a city; it is set out to become the next epitome of luxury and tranquillity for people in Pakistan and those looking forward to either moving back or investing in Pakistan. 

A smart city with intelligent technology that will not miss your eye, providing an eco-friendly environment (30% of the total area reserved for natural assets) and amenities; a grandeur lifestyle with modern construction ideas having an innovative economy and housing style. 

This project will be more than a living standard; it will provide an adaptable, recreational, social environment and create ample job opportunities for the residents and attract foreign investors.

Its smart features include:

  • Smart Security
  • Smart Building
  • Smart Health
  • IoT
  • Smart Transportation
  • Smart Resource Management
  • Smart Connectivity
  • Smart Facilities

An eco-friendly and sustainable urban development with all the civic infrastructure based on data collected through the residents, municipal buildings, transportation infrastructure, etc. 

The housing plan will be the second-largest smart city of Pakistan spread over thousands of Kanal of land.  

An appealing modern villa on its own with world-class attractions and unmatched facilities in the heart of Punjab. LSC offers the best residential and commercial plots and luxury apartments. The LDA approved the NOC of the project in February, and the acquired land has also been approved and confirmed by the project owners. Surbana Jurong is a Singapore-based consultancy firm appointed as the Master Planner for this entire scheme. It is one of the largest Asia-based urban, industrial and infrastructure consulting firms with 50 years of history and clients, providing creative, sustainable consultancy solutions.

Lahore Smart City Location 

The Lahore Smart City is planned to be developed along the Lahore by-pass road, covering 20000+ Kanals of land. The infrastructure of the society is designed and will be implemented upon the international standards of infrastructure withholding extraordinary development strategies. Its prime location makes it ever so unique, away from the hustle and bustle of the city but connected with all the primary road links to and from Lahore and having easy access to N5 GT road and M2 motorway. For real estate, location is the first thing that needs to be considered before any investment; location depicts the pros and cons of a society. Therefore, the LSC location carves out lucrative mid to long term business investment opportunities and a hub spot. 

Installment & Payment Plan

The plots that are for sale can be availed through easy payment plans. LSC has set10% down payment followed by confirmation payment and equal quarterly instalments. The instalment plans mentioned below are available for prelaunch bookings. 

As per the soft launch, the following payment plan is available for LSC for early investors.

Like Capital Smart City, the LSC is also set to comprise two major blocks.

  • Executive Block
  • Overseas Block

The executive and overseas blocks of Lahore Smart City are set to include the following sizes of plots:

  • 5 Marla Residential
  • 7 Marla Residential
  • 10 Marla Residential
  • 12 Marla Residential
  • 1 Kanal Residential

As per sources, the Lahore Smart City location and the map are officially released by FDH, and they are designed appropriately. 

Executive Block 

  • 5 Marla – Rs: 2,375,000/-
  • 7 Marla – Rs: 2,820,000/-
  • 10 Marla – Rs: 4,350,000/-
  • 12 Marla – Rs: 4,380,000/-
  • 20 Marla – Rs: 7,125,000/-

Overseas Block 

  • 5 Marla – Rs: 2,500,000/-
  • 7 Marla – Rs: 2,975,000/-
  • 10 Marla – Rs: 4,480,000/-
  • 12 Marla – Rs: 4,500,000/-
  • 20 Marla – Rs: 7,260,000/-

Rates can be revised by the project developers. The payment plans do not include development charges and are based on 3.5 years instalment plans. 

To wrap it up:

  • 10% down payment to be made on booking.
  • 10% confirmation charges to be paid after 60 days.
  • The remaining amount can be cleared in the span of 3.5-years.  

Booking Procedure

The booking process is very easy and smooth. It offers two options:

Download, print, and fill out the application form.

Deposit down for your selected property size through credit/debit card, interbank transfer or cheque in the name ofLahore Smart City (Private) Limited.”

Attach the following documents with your application form and send it to the address given on their website:

  1. Passport size recent photographs
  2. Copy of NICOP or Passport or Residence
  3. Copy of Nominee’s CNIC/NICOP
  4. Payment evidence
  5. Original deposit slip (PO/DD/Cheque) duly stamped by the bank

In case of an online transaction, get a print of a screenshot/transaction and attach it.

Print application form to fill out manually or get the computerized form by becoming a smart member of the society.

Deposit down payment for your selected size of the property along with the processing fee.

Pay the general payments online through your visa/master card or interbank transfer.

Smart City Features

The society provisions state of the art services and eco-friendly facilities. It provides all the good essentials that one can dream of in a perfect community.  

  • Hill Vista: The Hill Vista is a golfer’s point having the following eye-catching features; residential plots and villas, golf farmhouses, retail, food/beverages, golf club house, community club, 18-hole golf course, golf academy. 
  • China Village: A living combination of residential and commercial space with a beautiful crystal lake will become a recreational point as the city will grow. 
  • Financial Square: The central commercial hub has banks, offices, hotels, apartments, and gate offices.
  • Aviation Village: A commercial area with warehouses, exhibition halls, hotels, cold storages, and technical, operational offices.
  • Internet and smart software for weather, electricity, and traffic
  • Recreational activities
  • Aviation point
  • 24/7 gated security
  • Gas and water leak detection
  • Waste management
  • Smart streetlights
  • Water quality management
  • Public safety management
  • Intelligent shopping
  • Controlled electromagnetic emissions
  • Air pollution control
  • Traffic management
  • Educational facilities
  • Open-air theatre for residents and a great investment opportunity  
  • Bus lanes and stations for to facilitate inter-city travelling. 
  • Electric vehicles such as bikes and cycles provided to be used inside the society. This is done by giving electric bicycles and bikes to be used inside the society.

Not only this, but Lahore smart city also has wide boulevards with about 150-350 ft wide lanes. The streets are lightened with mesmerizing green belts and lights. 

The facilities and utilities offered by the (city electricity, gas, water) will be uninterrupted and limitless, having underground wired electricity and water supply. 

The most captivating motive of the Lahore smart city is the environmentally friendly infrastructure and facilities the developers have kept in mind in its making.

Keep following our blogs for more information and updates. Stay ahead and informed with Graana.




SECP amends REIT regulations to boost investment in real estate sector | Graana.com Blog


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ISLAMABAD: Security Exchange Commission of Pakistan (SECP) today (Tuesday) has amended the Real Estate Investment Trusts Regulations 2015 and has introduced a new framework for Public-Private Partnership (PPP) under REIT.

According to the details, the new amendments have made changes to the existing regulatory framework in which disclosure-based issuance has replaced approval-based issuance.

Furthermore, the new regulatory framework is designed to lessen the entry barriers for new REITs and to increase foreign investment in the real estate sector.

As per the notification, the documentation and system of approvals have also been made easier for the new REITs. A REIT Scheme has been made eligible to invest directly or by acquiring the shares of the company.

Simultaneously, SECP has also made changes to the SPV model in which the condition of transfer of title has been omitted.

The commission has also allowed PPP REITs to develop new infrastructure projects in consortium with the government.

 

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SBP revises regulations to enhance investment in real estate sector


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KARACHI: The State Bank of Pakistan (SBP) on Wednesday revised its capital adequacy regulations to enhance the investment in real estate sector.

As per the circular released by SBP, the central bank has reduced the risk weight of banks and DFIs by half from 200pc to 100pc on investment in Real Estate Investment Trusts (REITs).

The revised regulations have enabled the banks to enhance their investment in REITs without allocating large amount of capitals.

The circular of the central bank further notified that the central bank will revisit the amended regulations after five years.

 

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PIBs channelise foreign investment of $245.6mn in ten months


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KARACHI: As per the data released by the State Bank of Pakistan (SBP), Pakistan Investment Bonds (PIBs) channelised foreign investment of $245.6mn in the July-April period of FY 2020-2021.

According to the central bank, $21.5mn was offloaded by the foreign investors during the same period, the offloading recorded the total investment at $224.1mn.

On monthly basis, PIBs attracted $4.19mn in foreign investment during April 2021; whereas, the outflows stood at $5.3mn.

During the July-April period of FY 20-21, the investor from the USA invested $133.65mn in government securities; on the other hand, foreign investors from UAE invested $88.95mn.

 

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