Press Release

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

Karachi, September 22, 2021: 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 (RMC)) indicates that the asset manager exhibits very good management characteristics. Outlook on the assigned rating is Stable. The previous rating action was announced on September 04, 2020.

The assigned rating incorporates implementation of sound corporate governance and policy framework. The rating also reflects presence of experienced management and sponsor profile of Arif Habib and Dolmen Groups. AHDRML benefits from both operational experience and financial support of the sponsors in developing and managing real estate projects. Research and investment functions of the company are considered adequate. Fund wise concentration in assets remains as the company only operates a single fund. As per management, two development REITs- Silk Islamic Development REIT (SIDR) and Silk World Islamic REIT (SWIR) are expected to begin their operations soon which consequently will mitigate concentration risk to some extent.

Financial assessment of the company incorporates weakening in profitability profile during FY20 on account of lower rental income of the fund and higher operating expenses. However, improvement in management fees was noted during FY21 post gradual recovery in economic activity. Despite lower taxation and finance cost, profit after tax decreased further in FY21 because of lower dividend income and significant increase in operating expenses primarily contributed by higher salaries incurred for employee retention in a growing RMC industry. Funds from operation of the company as a result decreased and were reported lower in FY21. Debt payment and finance cost on long term debt drawn to partially finance investment in the upcoming REIT is expected to be paid through the additional management fee that the company aims to earn from the new REIT projects. Going forward, liquidity indicators are expected to restore back to adequate levels bolstered by income from new projects. Total equity base registered growth on account of profit retention. Given low-base effect, gearing levels were elevated at end-FY21. Ratings take into account projected increase in revenues with the addition of new REIT funds in pipeline, however, improved profitability along with lower gearing levels will be important for assigned level of ratings going forward.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext: 306) at (021) 35311861-66 or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Management Quality Rating of RMC (December 2018)

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