Public subscription for the initial public offering (IPO) of TPL REIT Fund I has officially begun, marking a significant step in the real estate investment landscape. The lead manager to the listing, Next Capital Limited, confirmed the commencement of the subscription to the main bourse on Thursday.
Investors have the opportunity to subscribe to the IPO until the end of May 3, 2024, with physical applications accepted until 5 PM and e-IPO applications accepted until midnight. The Fund is offering 1.25 percent (22.94 million) units at Rs. 17.59 per unit, aiming to raise Rs. 403 million.
TPL REIT Fund I operates under the Master-Feeder Fund Structure and is established as a trust under REIT Regulations in Pakistan. Presently, the fund has invested in three prominent projects: Mangrove, One Hoshang, and Technology Park, as reported by Topline Securities.
The initial size of the REIT stands at Rs. 18.35 billion, with 61 percent held by Anchor Investors and 39 percent by TPL Properties. The purpose of the sale offer is multifaceted, aiming to comply with REIT regulations, attract foreign investment, and determine the unit price in the market.
TPL Properties, a reputable Real Estate company in Pakistan, is the Strategic Investor in the TPL REIT scheme. Notably, eight commercial banks are the Anchor Investors, with a collective cash equity contribution of Rs. 11.25 billion into the REIT Scheme.
TPL Properties made a significant non-cash contribution of real estate assets valued at Rs. 7.1 billion into the REIT Scheme. Post-IPO, the General Public will hold 1.25 percent of shareholding, with existing unitholders’ holding reducing on a pro-rata basis.
Regarding pricing, the IPO offer is set at its Net Asset Value (NAV) value of Rs. 17.59/share. While there are no direct competitors for TPL REIT due to its perpetual and Hybrid REIT nature with a substantial developmental component, a finite-life developmental REIT called Globe Residency (GRR) is noted to be trading at a premium of 13 percent of its NAV value, as per the prospectus.