The Securities and Exchange Commission of Pakistan has notified amendments to the Real Estate Investment Trust Regulations, 2022, aimed at accelerating the development of REITs by simplifying procedures, strengthening governance standards and improving regulatory clarity.
The regulator said the revised framework introduces defined timelines for the transfer of real estate assets and shares of special purpose vehicles, a step intended to enable earlier listing of REIT schemes and enhance their visibility as a capital market asset class.
Under the amendments, the roles and responsibilities of REIT Management Companies and trustees have been reinforced, while regulatory arbitrage across different REIT structures has been addressed. The updated rules also improve alignment with the Shariah governance framework.
The SECP said procedures for the registration of trust deeds and the approval of REIT schemes have been streamlined to reduce processing delays.
Key regulatory changes include a refined definition of real estate to clearly distinguish between passive and active components, along with the introduction of income and asset test requirements consistent with international best practices. These measures are intended to ensure REIT schemes remain primarily invested in real estate and derive income mainly from such assets.
According to the regulator, the amendments were finalised after an extensive consultation process involving REIT management companies, trustees, banks, mutual funds, law firms and consultants. The process included the issuance of a consultation paper, multiple in-person and virtual meetings, further engagement on draft amendments and a concluding session held in Karachi.
REIT Regulations establish the legal framework for the formation, operation and management of REIT schemes, under which REIT management companies pool investor funds to invest in real estate projects, enabling unitholders to gain proportional ownership in income-generating properties and benefit from rental income and potential capital gains.
The SECP said the notification of the amended REIT Regulations has been uploaded on its official website.
