FLASHNEWS:

PACRA Assigns Initial Entity Ratings to BRB Properties Builders and Developers

Lahore, January 19, 2022 (PPI-OT):BRB Properties Builders and Developers is committed towards the construction of their first real estate venture Oasis Park Residencia. The company has shown progress towards the construction of bungalows which are expected to be completed by June’2025 as per agreed terms with Sindh Building Control Authority (SBCA). Additionally, the company has been successful in selling out more than 70% units with the aid of Zameen.com and through internal sales force. As a result, there has been a significant increase in the revenue stream with FY21 top line recorded at PKR 990mln (FY20: PKR 137mln).

This sales growth is evidence of the market acceptability of the project which is in return beneficial for the company in terms of creating their value in the real estate sector. With appreciation in the real estate market, the company expects a rise in the average price of bungalows in near future and plans on taking advantage of it. The company has manged their receivables efficiently against the sale of bungalows with a consumer friendly instalment plan which has improved the company’s liquidity.

The company has secured a facility of PKR 500mln (98% utilized) from Meezan Bank Ltd under the Musharaka agreement at KIBOR plus 250 bps. The financial risk of the company is low but remains subject to further borrowings in order to support future projects. Payment of tax liability related to assets declared under Tax amnesty scheme remains important for the ratings of the Company. Regarding future plans, the company has finalized architectural designs for the construction of two high rise buildings for commercial and residential use on the same land. Construction for both towers will begin in the first quarter of CY22.

The timely completion of the project and the adequacy of cashflows remain crucial for the company. The ratings are dependent on the future projects that the company plans on undertaking along with timely collection from customers against sale of bungalows and any further borrowings that would affect the financial risk profile of the company.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com