Press Release

VIS Reaffirms RMC Management Quality Rating of Arif Habib Dolmen REIT Management Limited

Karachi, January 10, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the REIT Management Company (RMC) Management Quality Rating (MQR) of Arif Habib Dolmen REIT Management Limited (‘AHDRML’ or the ‘RMC’) at ‘AM2+ (RMC)’ (AM Two Plus (RMC)). The RMC MQR of ‘AM2+ (RMC)’ indicates that the asset manager exhibits very good management characteristics. Outlook on the assigned ratings remains ‘Stable.’ Previous rating action was announced on December 11, 2023.

AHDRML was incorporated in 2009 as an unlisted public limited company. A joint venture between the Arif Habib and Dolmen Groups, the RMC focuses on launching Real Estate Investment Trust (REIT) Schemes and providing REIT management services under the Real Estate Investment Trust Regulations, 2022. After successfully launching its inaugural REIT scheme, Dolmen City REIT, in 2015, the RMC introduced Global Residency REIT in 2022, marking its continued engagement in the REIT sector. Since then, AHDRML has further expanded its portfolio to oversee a total of 13 REIT schemes.

The assigned rating incorporates AHDRML’s strong corporate governance framework with a well-structured Board and its Committees, promoting best governance practices. The executive management team comprises seasoned professionals with diverse expertise in the real estate sector, demonstrating a comprehensive understanding of the RMC's responsibilities in property management and the dynamics of the local property market.

AHDRML has implemented a comprehensive Risk Management Policy that addresses operational, credit, financial, reporting, and compliance/regulatory risks. The Board monitors risk-related matters through quarterly reporting, circulation of meeting minutes, and the engagement of qualified personnel. The rating is supported by the RMC’s established research framework, which leverages formal and informal sources to evaluate potential opportunities, and its adherence to a structured process for assessing property investments for inclusion in REIT schemes, ensuring alignment with its strategic investment policy.
The RMC's financial risk profile reflects an operating profit in FY24, with the reported net loss primarily driven by the impact of deferred tax and unrealized investment losses. Elevated interest rates also contributed to higher finance costs, alongside liquidity pressures from maturing long-term obligations. However, anticipated revenue growth from new REITs is expected to support earnings. The outcome of ongoing refinancing negotiations will be a key factor for the ratings, while continued sponsor support remains crucial. Looking ahead, prudent cash flow management, revenue diversification, and successful execution of new REIT launches will be vital for stabilizing financial metrics.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria: REIT Management Company
https://docs.vis.com.pk/docs/REITManagement-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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