The Pakistan Credit Rating Agency Limited
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Saadat Mirza

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PACRA Assigns Initial Project Grading to Oasis Park Residencia (A project of BRB Properties Builders and Developers)

Rating Type Project Grading
(13-Apr-21 )
Action Initial
Long Term PG3
Short Term -
Outlook Stable
Rating Watch -

The grading denotes prospects of execution of the real estate project as per plan and the ability to transfer the possession as per defined terms. The Project “Oasis Park Residencia” is first venture of the BRB Properties started in FY18 and will be completed in June'25 as per agreed terms with Sindh Building Control Authority (SBCA). Currently the Project is in developmental phase. BRB Properties shows strong commitment towards the Project and has already obtained complete spectrum of approvals. The business profile of the Project is improving as the Project is gaining attraction from the community. Marketing and sales partner is Zameen.com. As of Mar'21 the Company has already sold more than 50% of bungalows and recorded sales revenue of PKR 217mln in 1st half of FY21. With this increased sales, liquidity of the Company has improved (cash and bank balance as at end Dec'20 PKR 222mln; June'20 PKR 4.9mln). The Company is expecting rise in the saleable values, the average price of each bungalow is around PKR 15mln to PKR17mln. In FY20 revenue recorded at PKR ~137mln (FY19: PKR 36mln) a rise of 278%. FCFO stood at PKR 11mln in absolute terms. The financial risk profile remain subject to mobilization of customer advances. The BRB Properties has acquired the facility of PKR 500mln from Meezan Bank Ltd under Musharaka agreement at KIBOR plus 250bps. The available credit line is a cushion, though the management has not intend to leverage the balance sheet for this project, as mostly internal cash flows will take care of development cost. Payment of tax liability related to assets declared under Tax amnesty scheme might potentially effect the timely delivery of Project. Any further notice related to deferment granted remains critical for the project grading (expired on November 13, 2020). The land bank left from the residential Project would provide strength to the developer. The corporate structure of the developer is aligned with the assigned grading.
The grading is dependent on management's ability to complete the Project within defined parameters, any material deviation in plan, impacting risk profile of the company, will be negative.

About the Entity
Oasis Park Residencia project is earmarked for the construction of bungalows located at Deh Tore, Tapo Darsano Channo, Thluka Murad Memon, District Malir Karachi at main Super higway. The Project site, measuring 24 acre and 11.5 Ghuntas (117,552 square yards) of land and is divided in two division "bungalows and "commercial flats" The layout plan for bungalows area include 334 bungalows of 120 square yards, a mosque, club house, community center, 7 parks and 2 schools.
BRB Properties, Builders and Developers is a single member company, owned by Mr. Khawaja Bilal Azam, principal activity is development and sale of residential and commercial projects. The business office of BRB Properties is situated at Suite 101 & 102, First Floor, Rufi Trade Centre SB 29, Block 13 C Gulshan-e-lgbal. Karachi. Mr. Khawaja Bilal Azam is in the business of real estate as an investor since 2000 and is supported by Mr. Usman Tanzeel Khawaja being associated as COO since its inception. BRB properties has a lean but defined organizational structure. Each function is headed by an experienced resource.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.