Press Release

VIS Reaffirms Entity Ratings of Dolmen Private Limited

Karachi, February 10, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Dolmen Private Limited (‘DPL’ or the ‘Company’) at ‘A-/A2’ (‘Single A Minus/A Two’). Medium to long term rating of ‘A-’ indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of ‘A2’ indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on May 23, 2023.

Dolmen Private Limited, incorporated in 1986 under Pakistan's Companies Act, 2017, operates as part of the Dolmen Group, a prominent real estate developer known for residential, commercial, and retail projects such as Dolmen Mall Karachi, Tariq Road, and DHA Lahore. The company specializes in building, developing, and renting properties, with its registered office at Dolmen Estate, Shaheed-e-Millat Road, Karachi.

DPL’s business risk profile reflects exposure to the cyclical real estate and construction sectors, influenced by economic and political factors, fluctuations in purchasing power, raw material price volatility, and competitive pressures. During FY24, DPL's revenue growth was driven by rental and dividend income from its flagship assets, supported by annual rental escalations, improved occupancy levels, and steady dividend earnings from Dolmen City REIT units. Long-term tenant relationships with leading corporate entities and retail brands ensure stable income streams, with major properties with high occupancy. With the Dolmen Mall Lahore now operational, it is expected that is prime location, strong market positioning, and high initial occupancy will drive long-term revenue growth.

However, the financial profile of the Company remains constrained on account of elevated gearing and leverage largely led by cost overruns and project delays related to Dolmen Mall Lahore. The residential property market has also remained sluggish in 2024 which delayed sales proceeds and impacted liquidity. To address these challenges, the Company is undertaking measures such as debt reprofiling and additional financing to optimize cash flow. Ratings draw strength from the sponsors' established track record of completing and delivering high-quality projects, alongside DPL's substantial property portfolio, which serves as a buffer against potential debt servicing pressures. Strategic initiatives, including the planned sale of Grove Residency and the IPO of DHA Dolmen Mall Lahore under REIT scheme within the rating horizon, are expected to reduce leverage and improve liquidity. The successful execution of these plans remains critical to the maintenance of the assigned ratings.

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


Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Construction Industry
https://docs.vis.com.pk/Methodologies%202024/CONSTRUCTION-INDUSTRY-RATING-CRITERIA.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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .