TPL REIT Management Company Ltd’s has received approval for a master plan to create a gated residential complex on 40 acres in Korangi Creek at a cost of more than Rs200 billion.
The project will be built under the country’s first infrastructure-based real estate investment trust (REIT), which will operate similarly to any other property-owning firm but will provide investors with greater transparency.
According to TPL REIT Management Company CEO Ali Asgher, the project will include up to 3,000 residential apartments in a series of mid- to high-rise creekside towers, some commercial space, a hotel, and facilities such as hospitals and schools. A trustee, not the main shareholder of a REIT, is in charge of all of its assets. Within three years after its financial completion, the business must list on the stock exchange, giving small investors access to a real estate sector that is typically capital-intensive.
The master plan was created by engineering consultant SSH International and has already received Cantonment Board Korangi Creek approval. “It’s too early to provide a firm estimate of the project’s cost. We will now provide comprehensive drawings for each of the numerous towers we are constructing. I estimate that the overall expense will exceed Rs200 billion,” he said.
Mr. Asgher stated that the corporation will arrange cash from three sources to fund the project’s development. The Rs18.35bn TPL REIT Fund-I, which achieved financial close in June, will be the source of the first stream of funding. The first asset portfolio, which TPL Properties provided to the fund in the form of investment real estate, was worth Rs7.1 billion. Eight commercial banks that acted as anchor investors helped finance the remaining Rs11.25 billion.
However, only a portion of the money acquired through the Rs18.35 billion TPL REIT Fund-I will go to the 40-acre property. The remaining funds will be used by the business to build a technological park in Korangi and a 30-floor luxury apartment building in Karachi’s financial district. “Secondly, we’ll do more investment rounds to raise additional equity and debt. The income collected from home buyers through payment plans will be the third source of liquidity, the speaker stated. According to him, it is now impossible to provide a rough estimate of the cost of a typical dwelling unit on a per-square-foot basis because the project will take “eight to 10 years” to finish. He also stated that the other two projects under the same REIT would be completed in three years.