SECP proposes key reforms to boost REITs

According to Mettis Global, the Securities and Exchange Commission of Pakistan (SECP) has put forward a set of proposed reforms to encourage real estate investment trusts and relax several investment rules. Under the draft changes, the floor on income derived from property and connected holdings would drop from 75% down to 65%, giving REIT schemes more room to arrange their portfolios.

The draft also extends the maximum term of loans from sponsors, directors and related parties to 36 months, up from 24. Rental and investment schemes would receive an extra year before they must meet listing rules, while schemes could keep vacant land and plots for a minimum of one year during projects. The regulator is also weighing whether group trusts and employee funds should be permitted to back unlisted property schemes, a step that could widen the local investor base.

The SECP has also proposed streamlining how REIT schemes acquire properties from government and development bodies. According to the commission, these changes aim to promote patient investment, greater openness in the market and a stronger property investment framework. Stakeholders have been asked to send comments and recommendations before the regulatory framework is finalised.