Analyst
Muhammad Atif Chaudhry
Atif.Chaudhry@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Assigns Preliminary Rental REIT Rating to JS Rental REIT Fund
Rating Type | REIT Fund Rating | |
Current (30-Jun-22 ) |
||
Action | Preliminary | |
Long Term | A+(rr) | |
Short Term | - | |
Outlook | Stable | |
Rating Watch | - |
JS Rental REIT Fund (or the "Fund") is a perpetual, closed-end, conventional rental Scheme launched by JS Investment Limited. The Fund’s objectives are to achieve regular and stable returns through investments in a fully developed portfolio of sustainable developments and yielding assets in the real estate sector in Pakistan. The Fund would be listed on the stock exchange within three years of financial close. The building “The Centre” has been targeted for the REIT scheme which is situated at Abdullah Haroon Road, Saddar, Karachi. The site has a land area of 3,988sq.yds. The building is relatively new and completed in 2013. The building is a state of the art with branded lifts installed, HVAC plant and the latest security structure along with ample car parking space, a cafeteria, and gym. Out of the total 22 floors with the ground and mezzanine floor dedicated to the shopping Mall, six floors are parking floors, and 9th-14th floors are currently vacant. Initially, two floors i.e. 19th and 20th occupied by JS Lands have been converted into Rental REIT and the initial size of the fund is PKR 657 mln. The total cost of the scheme would be financed by a mix of equity and a pool of funds.
The rating would remain dependent on the sustainability of the RMC, successful fundraising, achievement of milestones, and listing of the Fund. Successful completion of each project and generation of expected return would remain critical for rating.
About
the Entity
JS Investments Limited was established in 1995 and is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has strong presence in the financial sector with entities operating in banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JS Investments possesses licenses for Asset Management, Investment Advisory, Private Equity, Venture Capital and REIT management. JSIL AMC is currently managing fourteen open-ended funds and two Pension funds with AUMs base of PKR 29.5bln. JSIL’s control vests in eight-member board of directors including the CEO. There are two independent directors while all other directors except the CEO are non-executive.