The REIT fund is seeking investment of Rs 403 crore through IPO

KARACHI:

TPL Real Estate Investment Trust (REIT) Fund-I is scheduled to offer at least 1.25% (22.94 million) units at Rs 17.59 per unit to the general public aiming to raise Rs 403 million in the current week in the stock of Pakistan Exchange (PSX).

Fund runners can choose to sell an additional 1.22% (22.39 million) shares through the unlocking of a green-shoe option, taking the total fund-raising to a maximum of Rs 797 million through the two-day initial public offering (IPO).

In brief comments on the offer for sale, Topline Research said TPL REIT Management Company Limited (TPL RMC), a 100% subsidiary of TPL Properties, has launched “Pakistan’s first and largest Shariah-compliant hybrid REIT namely the TPL REIT Fund-I”.

REIT Fund-I has invested in three projects including Mangrove, One Hoshang and Technology Park.

Currently, the shareholders of the REIT system consist of TPL Properties and eight commercial banks. The initial REIT size is Rs 18.35 billion. Of this, 61% is held by anchor investors and 39% by TPL Properties. TPL Properties is a strategic investor and the eight commercial banks are anchor investors.

The strategic investor made a non-cash real estate contribution to the scheme worth Rs 7.1 billion, while the core investors made a collective cash contribution of Rs 11.25 billion. The units for sale are priced at Rs 17.59 per unit equal to the net asset value (NAV) of the REIT.

The NAV due to ongoing progress across TPL REIT’s three projects will be distributed quarterly through the PSX, providing potential investors with periodic updates and driving the listed unit price. A negotiated price will be beneficial to all “marked to market” investor portfolios.

The research house said the purpose of the sale offer was to comply with REIT regulations, attract foreign investment and discover the unit price.

It clarified that the offer was made to ensure compliance with REIT Regulation 7 which requires REIT schemes to be listed within a maximum of three years from the date of transfer of real estate or financial close, whichever is later. The financial closure of the fund was declared on June 24, 2022.

The listing will help the project meet the interest of foreign investors. The company prospectus states that TPL RMC has received inquiries from many foreign investors regarding participation in the scheme.

This will be the third IPO and listing on the PSX in the current calendar year as companies return to the stock market to raise shares following the restoration of political and economic stability in the country.

The stability is reflected in the rising benchmark KSE-100 on the PSX. It has briefly crossed 73,000 units this week compared to 40,000 units in June 2023. Earlier, Secure Logistics Group successfully raised Rs 600 million through the sale of 50 million shares at Rs 12 per share at the end of March 2024.

Also, International Packaging Films aims to raise a minimum investment of Rs 1.47 billion through the offering of its 70.1 million shares at a price starting at Rs 21 per share in an auction to be held next week.

Published in The Express Tribune, May 2^n.d2024.

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