KARACHI: The Securities and Exchange Commission of Pakistan has notified amendments to the Real Estate Investment Trust Regulations, 2022, aimed at simplifying procedures, strengthening governance and promoting greater transparency in REIT operations.
The revised framework introduces clearer timelines for the transfer of real estate and shares of special purpose vehicles, encouraging the earlier listing of REIT schemes to improve their visibility and development as a capital market asset class. It also strengthens the roles and responsibilities of REIT management companies and trustees.
The amendments address regulatory arbitrage across different REIT structures and improve alignment with the Sharia governance framework. Procedures for the registration of trust deeds and approval of REIT schemes have also been streamlined.
Key changes include refining the definition of real estate to distinguish between passive and active components, and introducing income and asset test requirements in line with international best practices. These measures ensure that REIT schemes remain primarily invested in, and derive income from, real estate assets.
The changes follow extensive consultations with stakeholders, including management companies, trustees, banks, mutual funds, law firms and consultants, through in-person and virtual sessions.
REIT regulations provide the legal framework for funds that pool investor capital for investment in income-generating real estate, offering unitholders returns through rental income and capital gains.
