Press Release

VIS Reaffirms REIT Rating of Dolmen City REIT

Karachi, November 29, 2023: VIS Credit Rating Company Limited (VIS) reaffirms rental REIT Fund Rating of Dolmen City REIT (DCR) at ‘AAA (rr)'(Triple A Rental REIT). The Rental REIT Rating of “AAA (rr)’ denotes highest capacity to maintain stable rental income. Risk factors impacting value of REIT assets are negligible over the foreseeable future. Outlook on the assigned ratings is ‘Stable’. Previous Rating action was announced on October 25, 2022.

Dolmen City REIT (DCR) is a perpetual, closed-end rental REIT operating under Shariah-compliant principles within the real estate sector. Managed by Arif Habib Dolmen REIT Management Limited, DCR portfolio includes the Harbour Front (office space), Dolmen Mall (retail mall), and ancillary parking facilities.

The assigned rating incorporates the profile of Dolmen and Arif Habib Groups, having sound financial profile and experience in the real estate sector. Rating incorporates the competitive advantage of the REIT property based on its location, provision of amenities, high quality maintenance services and security.

Ratings also take into account DCR diversified income streams, and strong tenant profile. The entity operates a property comprising Dolmen Mall and Harbour Front, with a revenue mix of 80% from retail rentals and 20% from office space. The mall and office spaces are tenanted by a mix of reputable local and international brands and corporates exposing DCR to lower counterparty credit risk. Furthermore, the property maintains strong competitiveness due to its high occupancy rates—above 97%. This is further supported by the length of the tenancy agreements which further mitigates vacancy risk.

With the increase in footfall metrics, rent waivers have been phased out and rent increase has been implemented, which has
resulted in revenue growth of 21%. Operating profitability (profit before change in fair value of investment) was also up by 21%.
The rating also draws comfort from an unleveraged capital structure with no debt. Going forward, maintenance of financial risk
profile will remain important for rating.

For further information on this ratings announcement, please contact Nikeeta Rani at 021-35311861-64 (Ext. 215) and/or the
undersigned at 021-35311861-64 (Ext. 207) or email at info@vis.com.pk.

Sara Ahmed
Director

Real Estate Investment Trust (REIT) Fund (September 2023)
https://docs.vis.com.pk/docs/REIT-Methodology-2023.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .