Lahore, June 17, 2023 (PPI-OT): Nishat Hotels and Properties Limited (‘NHPL’ or 'the Company') primarily owns, manages, and operates a shopping mall, hotel, and banquet halls under the name of ‘Nishat Emporium’ and ‘Nishat Hotel'. The Company also operates in the real estate business under the name of ‘Nishat Residences’ that mainly comprise of residential apartments. NHPL’s ratings reflect a prominent business profile and a solid brand name in the hospitality and real estate segments. The Company has set up multiple projects comprising state-of-the-art infrastructures. The ratings take comfort from the Company’s association with Nishat Group, one of the leading business conglomerates in Pakistan.
Over the years, Pakistan’s hotel and retail industry has witnessed growth and transformation, driven by various factors such as increasing consumer spending, a growing middle class, urbanization, and improved infrastructure. These dynamics have created new opportunities and challenges for businesses operating in the sector. Both domestic and international hotel chains have recognized the potential of Pakistan's hospitality sector. Major hotel brands are entering the market or expanding their existing properties to cater to the rising demand for quality accommodations, including luxury, business, and budget segments.
Accordingly, the Company is also able to achieve operational sustainability. Further, the hotel occupancy rates and average daily room rates have shown considerable improvements which translated into better financial performance. Commercial and business activities in Emporium Mall have also shown a rising trend and achieved splendid footfall during period under review, showing positive indication. In the real estate business segment, sales of apartments in the Nishat residences are striding. The Company has benefited from a strong governing board, and operations draw support from skilled and professional management. Financial risk profile of the Company is considered adequate with comfortable coverages, cash flows, and working capital cycle. Capital structure is leveraged where borrowings are mainly comprised of long-term borrowings.
The ratings are dependent upon the sustainability of operations amid changing business environment, and improvement in revenues and margins. The Sponsor’s support and future cash flows from the sale of apartments are vital. At the same time, management of financial risk, particularly debt coverages, remain important, also consistency in the performance indicators will have a positive impact on the ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com