Lahore, January 10, 2022 (PPI-OT):The assigned rating emanates from ISE Towers REIT Management Company Ltd.’s (“ISE Towers or “The Company”) business profile characterized by stable operating revenue and robust demand. The diversified shareholding pattern of the Company comprises 236 shareholders (Corporates, Banks, DFIs, Insurance Companies, Modarabas, pension funds, and others). The assigned rating incorporate sound corporate governance, an experienced management team, an adequate control environment, and Company’s pioneer status in the capital markets. The compliance function ensures adherence to all applicable internal and external rules and regulations.

The Company is deriving its core income from its dominating asset “ISE Towers” which is enjoying an almost 100% occupancy level. The rental revenue grew by only ~6% due to strained operating environment caused by the pandemic. The multistory building is situated in the prime location Blue Area, Islamabad. The Company is planning to convert the ISE Towers into REIT Fund. The project has achieved significant progress, in the shape of obtaining requisite approvals under REIT Regulation, 2015, and the REIT Fund is likely to be launched in FY22.

The funds generated from this fund will be utilized to undertake new REIT projects. The Company is planning to diversify into hybrid and development REIT schemes. The profitability of the company is growing at a moderate pace and reported at ~PKR 510mln for FY21 (FY20: PKR 339mln). The Company has acquired a trustee company “Digital Custodian Company Limited” in order to diversify its business.

The business risk of the company is supported by high-profile tenants, economic recoveries, and improving COVID-19 situation in the country. The Company has zero leveraging and its liquidity position remains comfortable. The equity stood at ~PKR 6.1bln at the end-Jun’21 (Jun’20: ~PKR 5.7bln). The ratings are dependent on the Company’s aptness to uphold its business and financial risk profile under the prevailing volatile macroeconomic environment and risk profile of new REIT projects. Sustenance of growth momentum is imperative.

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