PACRA Maintains Entity Ratings of TPL Properties Limited
TPL Properties owned a high-end office building (Centrepoint) in Karachi. The Company entered into a sale agreement with Bank Al Habib to sell its flagship project at a transaction value of PKR 8bln. Thus, rental revenue's contribution towards the topline will not be observed in the upcoming future years as the revenue stream majorly would be dependent on the timely completion of company's current and future development projects. TPL Properties paid-off its entire debt obligations through the cash proceeds received from the sale agreement. The financial risk profile remains adequate; will be supported by additional cashflows expected from new projects. Some of the related projects are on the cards which might alleviate concerns pertaining to cash flows. Going forward, TPL Properties is pursuing four projects 1) One Hoshang - residential apartments, 2) Logistics Park, 3). Technology Park, 4). Korangi 40 Acres. One Hoshang will comprise luxury residential apartments and advance sale model will be followed for this project. The project previously faced delays owing to ban on high rise constructions in Karachi. The management is expecting to receive one time cash dividend upon completion of the One Hoshang project in June 2024. The Technology Park project consists of high end office space and 42 keys boutique hotel. The Company will follow a hybrid business model whereby partial office space will be sold on plan basis, while the remaining office space will retained and operated on rental basis. The hotel will be retained and operated by the company.
The ratings are dependent on management's ability to ensure adequacy of cashflows through the timely completion of upcoming projects. Any material deviation in strategy impacting risk profile of the company will be negative.
TPL Properties is the real estate arm of TPL Group. The company is engaged in real estate development and property management. 'Centrepoint' was company's first project. TPL Properties is majority (51%) owned by TPL Group. TPL Properties has eight-member board of directors. Four members, including one executive and three non-executive members, represent TPL Group while three members are independent from sponsoring group. Mr. Ali Jameel, the CEO, is supported by an experienced team. During the year Mr. Abdul Wahab Al Halabi joined the board as an independent director. Mr. Abdul Wahab Al Halabi has over 23 years of experience in the field of executive management. He was previously on several boards including Emirates REIT Management which managed Emirates REIT, a NASDAQ Dubai listed entity, Plant Pharmacy LLC and several other private enterprises.