PACRA maintains the rating of TPL REIT Management Company Limited

The assigned rating reflects TPL REIT Management Company Limited’s ("TPL-RMC" or the "Company") adequate financial profile and capital base, supported by adequate governance structure anchored by an experienced and diverse Board. The Company launched Pakistan’s first Hybrid Shariah-compliant REIT, “TPL REIT Fund I,” in December 2021, achieving its first close at PKR 18.35bln—fully drawn by June 2024—and subsequently listing the Fund on the Pakistan Stock Exchange. The Fund initially comprised three projects housed in separate Special Purpose Vehicles (SPVs) namely: i) The Mangrove (Waterfront mid-rise community); ii) Technology Park (Commercial Office & Business Hotel); and iii) One Hoshang (Luxury residences), with The Mangrove being the primary project comprising more than 90% of the envisaged built-up area. As of now, the Fund has announced divestment from One Hoshang, while the project land for Technology Park has been divested and the project has been relocated to The Mangrove Project site, in view of a more feasible value proposition. As a result, the Fund’s operations would be concentrated in its primary project, The Mangrove, which remains the only active development in the portfolio. The divestment from One Hoshang and Technology Park translates in higher concentration risk, placing greater emphasis on the timely execution and performance of the remaining asset for rating sustainability. These developments occur amid a gradual recovery in Pakistan’s real estate and construction sector in FY25, supported by easing inflation, lower interest rates, and a more stable macroeconomic environment. Early-year activity was subdued due to high costs and weak demand, but recovery is strengthening as RMC (REIT Management Companies) registrations rise, investment flows stabilize, PSDP (Public Sector Development Programme) spending increases, and government measures—including anticipated tax relief—support sector activity. Improved financing conditions and sentiment are expected to sustain growth in both commercial and residential real estate.
On the financial front, during FY25, TPL-RMC’s equity base stood at PKR 1,679mln (FY24: PKR 1,489mln), comfortably above regulatory requirements. Revenue strengthened on the back of management fee income, leading to a Profit After Tax of ~PKR 190mln (FY24: PKR 126mln). The Company also enhanced its investment position in its subsidiary to facilitate potential foreign investment inflows. While these measures reinforce long-term sustainability, future earnings remain sensitive to the performance and timely delivery of the Fund’s sole remaining project. TPL-RMC’s strategic priorities continue to focus on operational discipline, effective project monitoring, and maintaining investor confidence through transparent reporting. The Company’s ability to mitigate concentration risk, ensure steady progress on Mangrove development, and capitalize on improving macroeconomic conditions will remain critical to maintaining the assigned rating.
The ratings remain sensitive to the timely and successful execution of the remaining REIT Fund project, as concentration risk has increased, as the Fund would be reliant on a single asset. Continued adherence to strong governance and regulatory standards will also be essential. The Rating Watch reflects PACRA’s expectation that TPL-RMC will further strengthen its operational framework, maintain financial sustainability, and ensure steady progress on the ongoing project within the defined timelines.

About the Entity
TPL-RMC was incorporated in October 2018 as a public limited company. It is licensed by the Securities and Exchange Commission of Pakistan to provide REIT management services under the NBFC Rules, 2003, and the REIT Regulations, 2015. It is a wholly owned subsidiary of TPL Properties Limited, the real estate arm of TPL Corp. The Company’s Board of Directors comprises seven members, including five independent directors and two non-executive directors. Mr. Jamal Baquar is the CEO of the Company, supported by a qualified team of professionals.