Pakistan launches South Asia’s first real estate investment trusts
Advertisement
Advertisement
At a time when Indian realtors and investors are struggling to start Pakistan-based
A REIT is a financial instrument where the underlying asset is real estate. The rental income from the property assets are distributed by the trust as dividends to the investors or unit holders of the trust.
Interestingly, yields for the Dolmen City REIT's investors in the first year are a percentage point lower than the current yields on Pakistan's government securities (GSec) that are now trading at 9.75%.
REITs notes trade at positive spread across the world. This was based on estimation of rental income from the asset, 90% of which have to be distributed back to investors. But even then, there were few global investors who bit the story -- only 0.6% of HNIs/Institution allocation.
Advertisement
Pakistan has streamlined the process significantly to make it attractive for investors. For example, their REITs attract a withholding tax of 10% (in-line with
Moreover, the regulators there have agreed to concessional tax regime for transfer of an asset into a REIT with significant reduction in stamp duty across the region.
In comparison to India -- despite the recent relaxations on taxability like MAT exemption, tax pass through to REIT - and simplification of structuring, the REIT controlled special purpose vehicles (SPV) are still subject to corporate and dividend distribution tax (
This makes it imperative on the SPV to restructure to reduce the tax blow. According to analysts, while debt infusion at SPVs could improve the yields of the instrument, a simplified structure allowing tax pass through would improve transparency and improve visibility of returns to investors.
(Image: Indiatimes)
Advertisement
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Having an regional accent can be bad for your interviews, especially an Indian one: study
- Dirty laundry? Major clothing companies like Zara and H&M under scrutiny for allegedly fuelling deforestation in Brazil
- 5 Best places to visit near Darjeeling
- Climate change could become main driver of biodiversity decline by mid-century: Study
- RBI initiates transition plan: Small finance banks to ascend to universal banking status
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market