By ProPK Staff | Published Aug 24, 2022 | 7:43 pm
The Securities and Exchange Commission of Pakistan (SECP) has allowed Modaraba companies to deal or trade in real estate projects recognized by development authorities. In this regard, SECP has issued a notification. According to the notification, a Modaraba company can hold, deal or trade in real estate projects, subject to the conditions mentioned below.
In case of a multipurpose Modaraba, where investment in real estate is up to one-third of the total assets of the Modaraba, the Modaraba shall comply with the following conditions:
- The investments shall be made only in assets recognized by development authorities, i.e. Karachi Development Authority, Capital Development Authority, Rawalpindi Development Authority, Lahore Development Authority and/or any other Development Authority in any city of Pakistan and should be accompanied by No Objection Certificate (NOC) relating to real estate project from the aforementioned authority.
- The purpose of investment can be to develop properties for rental, developmental or mixed projects.
In case of a specific-purpose Modaraba for investment in real-estate, or where investment in real estate is one-third or more of the total assets of the Modaraba, the Modaraba, in addition to conditions stipulated above, shall also comply with some additional conditions:
- At least two directors of the Modaraba Company shall have a minimum of five years of experience of dealing with the real estate projects
- A valuation report from the independent valuator shall be obtained.
- The prospectus of the Modaraba shall contain information relating to the management experience of sponsors of the Modaraba company in the real estate business, the type of real estate project to be undertaken, potential locations of the real-estate, investment objectives, valuation report, feasibility study, the legal status of the property, funds required, sponsors contribution, and the compliance with the lock in period requirement for the sponsors.
https://propakistani.pk/2022/08/24/secp-allows-modaraba-companies-to-deal-in-real-estate/