Press Release

VIS Reaffirms Rental REIT Rating of Dolmen City REIT

Karachi, December 02, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Rental REIT rating of Dolmen City REIT (‘DCR’ or the ‘Scheme’) at ‘AAA (rr)’ (Triple A Rental REIT). The Rental REIT rating of ‘AAA (rr)’ indicates 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 remains ‘Stable.’ Previous Rating action was announced on November 29, 2023.

DCR is a perpetual, listed, closed-end, Shariah-compliant rental REIT scheme launched by Arif Habib Dolmen REIT Management Limited (AHDRML). Located in the Clifton area of Karachi, the Scheme comprises Harbour Front (office space), Dolmen Mall (retail mall), and an associated parking facility. It has been operational for several years, with all activities, including deposits, bank placements, and rental and marketing income, adhering to Shari’ah principles. The Scheme’s primary activity is generating rental income through its investment property and distributing this income to unitholders as dividends.

The assigned rating incorporates DCR's unleveraged capital structure, as it carries no debt on its books. Additionally, the rating also considers the profiles of the Dolmen and Arif Habib Groups, both of which are financially sound and possess significant experience in the real estate sector.

The rating reflects sustained high occupancy rates. Since its inception in 2015, DCR’s real estate has maintained high occupancy levels, standing close to 97.5%. Key factors driving the property’s competitiveness include its quality of services, amenities, facility maintenance, and geographic location. During the review period, DCR reported a rental income increase of over 12%, driven by higher occupancy levels and new tenant onboarding, which collectively improved revenues.

The rating also factors in the diversified income streams from the shopping mall and office space. During the review period, the onboarding of new tenants in the shopping mall has further added to its already diverse consumer offering. Moreover, in FY24, customer-focused marketing and branding efforts effectively sustained strong footfall at the mall. The real estate portfolio continues to benefit from credible tenants, with Dolmen Mall Clifton featuring a mix of local and international brands that sustain consistent customer traffic. This is further supported by multi year lease commitments, supporting predictable rental income streams. The office building, housing multinational corporations, reflects lower counterparty credit risk. Going forward, maintaining financial and operational stability will remain important from the ratings perspective.

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

Applicable Rating Criteria: REAL ESTATE INVESTMENT TRUST (REIT) FUND
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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .