Press Release
VIS Reaffirms Management Quality Rating (RMC) of Arif Habib Dolmen REIT Management Limited
Karachi, December 11, 2023: VIS Credit Rating Company Limited has reaffirmed the Management Quality Rating (RMC) of Arif Habib Dolmen REIT Management Limited (AHDRML) at ‘AM2+ (RMC)’ (AM-Two Plus (RMC)). The rating of ‘AM2+ (RMC)’ (AM-Two Plus (REIT Management Company)) indicates that the asset manager exhibits very good management characteristics. Outlook on the assigned rating is Stable. The previous rating action was announced on October 25, 2022.
Arif Habib Dolmen REIT Management Limited (AHDRML), is an unlisted public limited company established in 2009 and operates within Pakistan's real estate sector. It is a joint venture between the Arif Habib Group and Dolmen Group. Ratings are underpinned by strong business profile and AHDRML being the first RMC to launch a REIT scheme in Pakistan. AHDRML has successfully managed the Dolmen City REIT since 2015 and expanded its portfolio to 10 REIT schemes. Recent years have seen the launch of the Global Residency REIT, Silk Islamic Development REIT and Silk World Islamic REIT. During FY23, the RMC has launched 5 additional REIT schemes that are majorly development REITs and one Rental REIT named DHA Dolmen Lahore REIT. Going forward, the RMC plans to launch 5 additional funds which would be developmental REITS.
Rating incorporates the financial risk profile of AHDRML, whereby revenue increase has been recorded primarily from management fees received from new funds. Operating profitability (profit before unrealized gain on investments) however was lower on account of higher financial charges against long term debt secured to fund investment in Silk Islamic Development REIT. Nevertheless, a notable increase in net profitability was recorded on account of unrealized gain booked against the said investment. The RMC is well-positioned with a net equity exceeding the minimum capital requirements, and an improving gearing ratio, however liquidity profile is constrained on account of higher outstanding receivables. Timely realization of receivables remains key. At the same time, augmentation of management fees through addition and launch of new funds will remain important for future debt servicing obligations of the Company. Going forward, continuous commitment from sponsor in case of need will remain a key rating driver.
For further information on this rating announcement, please contact Mr. Amin Hamdani (Ext: 217) or the undersigned (Ext. 207) at 021-35311861-70 or email at info@vis.com.pk.
Sara Ahmed
Director
Applicable Rating Criteria: REIT Management Company (October 2023)
https://docs.vis.com.pk/docs/REITManagement-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf