Press Release

VIS Reaffirms Ratings of Javedan Corporation Limited (JCL)

Karachi, July 27, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Javedan Corporation Limited (JCL) at ‘A+/A-1’ (Single A Plus/A-One). The medium to long-term rating of ‘A+’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of ‘A-1’ denotes high certainty of timely payments. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. Outlook on the assigned ratings is ‘Stable’. Rating of Sukuk has also been reaffirmed at ‘AA-’ (Double A Minus). The assigned ratings to the Sukuk incorporate strong debt servicing ability and structural features of the issue. Previous rating action was announced on Mar 28, 2022.

JCL has launched a housing scheme by the name of “Naya Nazimabad” (NN) in 2011, situated at Manghopir, Karachi. It adjoins Nazimabad, North Nazimabad and North Karachi. The project is spread over 1,366 acres and the target market are middle and upper middle-class economic strata. The assigned rating incorporates implicit support of the Company’s majority shareholder i.e., the Arif Habib Group. Assessment of business risk profile also takes into account strong brand name developed over the years, strategic location of the project, security features and amenities offered. In addition, sizeable valuable land owned by the Company, further supports the business risk profile.

JCL has successfully completed the cycle of Globe Residency REIT transaction in the outgoing year. Globe Residency Apartments were launched in Nov’21 and subsequently transferred to REIT scheme in Mar’22 under the name of Globe Residency REIT (GRR). GRR is the first developmental REIT Scheme in the country which was listed at Pakistan Stock Exchange (PSX) in Dec’22. Accordingly, during FY22, topline exhibited multifold growth, largely led by sale to Global Residency REIT, comprising around three-fourth of the total sales. Gross margins, albeit remained sizable, decreased primarily due to the nature of sales mix in the outgoing year. However, the bottomline, as well as net margins, improved notably mainly as a result of higher gross profitability. During 9M’FY23, net sales posted a significant growth vis-à-vis SPLY, emanating majorly from sales of NN Apartment REIT, with some increase in gross margins. Resultantly, net profitability augmented with further improvement in net margins despite higher financial charges and flyover costs incurred during the period. In addition, other income largely pertaining to transfer fees from plots and bungalows, markup income on saving accounts and loans to related parties and remeasurement gain on investment properties, has provided support to bottomline on a timeline basis.

The liquidity profile of the Company is underpinned by adequate recovery ratios to support financial obligations. Additionally, going into REIT mode of development has improved the cash flow position of the Company. Given a major chunk of receivables pertaining to REIT sales are due in Dec’23, timely recovery of the same is considered imperative from rating perspective. Leverage indicators have remained at comfortable level on account of growth in equity base despite increase in overall debt levels. Meanwhile, ratings will remain dependent on materialization of planned developments in timely manner and realization of projected sales and profitability.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz, CFA at 042-35723411-13 (Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 207) or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Rating scale (2023)

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