Islamabad: The Securities and Exchange Commission of Pakistan (SECP) has issued new regulations for Real Estate Investment Trusts (REITs) with the aim of easing prerequisites for the establishment of funds.
The SECP has replaced the REIT Regulations 2008 with REIT Regulations 2015, considering the former a failure since only five REIT companies could be set up under those regulations.
An SECP official recently told reporters that the previous regulations failed to succeed because of their cumbersome requirements for establishing REIT companies. The official said REITs were required to bolster the property sector, which was replete with malpractices.
According to a news report, a number of changes have been made to REIT Regulations in a bid to accommodate the stakeholders of the property sector. Under the REIT Regulations 2015, paid-up capital of Rs 50 million, instead of Rs 200 million, is required to establish a REIT management company.
A REIT management company official told reporters that the REIT fund could be traded as stocks in the stock exchange and small investors could take advantage of increasing property prices through these units. He also said the provinces were required to enforce land-related laws to make REITs a success.
