Shariah-compliant REIT plans public offer of 44.06 million units as sponsors retain an 85% combined stake after listing.
KARACHI: The Naya Nazimabad Apartment REIT (NNAR) is set to offer a 15 per cent stake to investors through an Offer for Sale (OFS) ahead of its planned listing on the Pakistan Stock Exchange (PSX), according to the offer document.
The REIT will offer 44.06 million units with a face value of Rs10 per unit, representing 15 per cent of its total outstanding units.
Under the proposed offering, 75 per cent, or 33.05 million units, will be allocated through the book-building process at a floor price of Rs18 per unit, with a price band extending up to Rs23 per unit. The remaining 25 per cent, comprising 11.02 million units, will be offered to retail investors at the strike price determined through the book-building process.
The retail portion of the offer has been fully underwritten by Ismail Iqbal Securities (Private) Limited and Sherman Securities (Private) Limited.
Sponsors to retain majority ownership
Before the public offering, Javedan Corporation Limited (JVDC) owns 74 per cent of the REIT through 217.38 million units, while Arif Habib Corporation Limited holds the remaining 26 per cent.
Following the completion of the offer, JVDC’s shareholding will reduce to 59 per cent, Arif Habib Corporation will retain its 26 per cent stake, and public investors will collectively own 15 per cent of the REIT.
Portfolio includes projects in Karachi and Lahore
The Naya Nazimabad Apartment REIT is a closed-end, Shariah-compliant developmental REIT established under the REIT Regulations, 2022.
Its investment portfolio consists of three major real estate assets:
• Seven commercial plots in Naya Nazimabad, Karachi, covering approximately 46,597 square yards.
• 216 residential plots in the Bankers Avenue Cooperative Housing Society (BACHS) on Bedian Road, Lahore.
• 76 retail units in the IT Tower located in Gulberg, Lahore.
According to the offer document, the seven commercial plots in Naya Nazimabad were acquired for Rs5.82 billion, financed through Rs2.94 billion in equity and Rs2.89 billion in Musharaka financing.
Listing aimed at regulatory compliance
The proposed listing is intended to comply with Regulation 7 of the REIT Regulations, which requires REIT schemes to be listed within three years of the transfer of real estate assets or financial close.
The REIT expects the listing to strengthen corporate governance through enhanced oversight by the Pakistan Stock Exchange, broaden its investor base by attracting mutual funds, pension funds, insurance companies and other institutional investors, and improve transparency through the regular publication of its quarterly Net Asset Value (NAV).
Strong turnaround in financial performance
The REIT reported a net profit of Rs1.22 billion for FY2025, compared with a loss of Rs587.29 million in FY2024.
Earnings per unit improved to Rs4.14, while the breakup value increased to Rs11.98 per unit, up from Rs7.84 a year earlier.
Total financing stood at approximately Rs8 billion, while the long-term debt-to-equity ratio improved to 2.27 times, compared with 2.95 times in the previous financial year.
According to the offer document, the improvement in unit holders’ funds was primarily driven by a change in the accounting estimate relating to the carrying value of Musharaka liabilities.
No material litigation
The offer document also states that there are no material legal proceedings outside the ordinary course of business involving the REIT scheme, its management company, sponsors, directors or associated entities that could have a significant adverse impact on its operations or financial position.
Disclaimer: This article is based on information contained in the Offer for Sale Document of the Naya Nazimabad Apartment REIT (NNAR) and is intended solely for informational and news reporting purposes. It does not constitute investment, financial, legal, or tax advice, nor should it be construed as a recommendation or solicitation to buy or sell any securities. Investors are advised to read the complete offer document and consult licensed financial advisors before making any investment decisions. All investment decisions are subject to market risks.