SECP proposes reforms to boost real estate investment trusts

The Securities and Exchange Commission of Pakistan (SECP) has proposed a series of reforms aimed at promoting Real Estate Investment Trusts (REITs) and encouraging long-term investment in the country's real estate sector. The proposed amendments seek to make REIT structures more flexible while improving transparency and facilitating investment in rental and other real estate schemes. The SECP has invited stakeholders to provide feedback on the proposed amendments. Key changes proposed for REITs Under the proposed reforms, the SECP plans to reduce the minimum ratio of income and assets that must be derived from real estate from 75% to 65%. The regulator has also proposed extending the maximum loan tenure from sponsors, directors and related entities from 24 months to 36 months. Another proposal calls for a one-year extension for the listing of rental and investment real estate schemes. The SECP is also considering allowing real estate schemes to hold vacant land and plots for a minimum period of one year. Wider investment opportunities The proposed amendments would also consider allowing specific group trusts and employee funds to invest in unlisted real estate schemes. The regulator said property acquisition from government departments and development authorities would also be further streamlined under the proposed reforms. According to the SECP, the measures are intended to create a more conducive regulatory framework for REITs and facilitate greater participation in the real estate investment market. SECP seeks stakeholder feedback SECP Chairman said the proposed reforms would help foster long-term investment and contribute to the development of a more transparent real estate market. The commission has sought feedback from relevant stakeholders before proceeding with the proposed amendments.