FLASHNEWS:

PACRA Maintains Entity Ratings of TPL Properties Limited

Lahore, May 06, 2022 (PPI-OT):TPL Properties Ltd (TPL properties or the Company) has significant presence in Real estate sector for more than a decade. The sponsors have a very good understanding of the business. TPL properties after the sale of its first and flagship project “centrepoint” is re – strategizing its business model from rental yield. New model comprises of TPL RMC, and RMC is managing the TPL REIT Fund I, there will be four core pillars to the revised business model of TPL properties. I) it will own a portion (approx.38%) of the REIT based on the contribution of land and project developed to date, REIT will provide dividends to the Company. II) it will continue to develop the projects and will receive development fees. III) as the owner of the RMC, it will receive dividends as the RMC receives management fees for REIT.

It will continue to own TPL Property Management Services whereby more projects managed in the future will provide additional earnings to the Company. The Company has approved the transfer of its projects namely “One Hoshang”, “Technology Park” and “Mangrove 40acres” to the TPL REIT Fund I where company will also realize Capital Gains. The financial risk profile remains adequate; will be supported by additional cashflows expected from new projects. Furthermore, company arranged substantial working capital financing to bridge the gap of construction projects. Thus, soaring leveraging to 41%. However, with appreciation in the real estate market, the company expects a rise in the market demand in near future and plans on taking advantage of it.

The ratings are dependent on management’s ability to ensure adequacy of cashflows through the timely execution of the transfer of the SPVs to the REIT Fund. Any material deviation in strategy impacting risk profile of the company will be negative.

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