Sindh Real Estate News and Land Insights

Karachi | ReNews Pakistan
The Sindh Assembly’s Public Accounts Committee (PAC) has sought detailed town-wise records of billions of rupees collected as road cutting charges from utility companies, raising concerns over the continued poor condition of roads excavated for underground infrastructure across Karachi.
The issue was taken up during a PAC meeting chaired by Nisar Khuhro, where committee members questioned local government officials about the amount collected by individual towns and how the funds had been utilised.
Utility companies are required to pay road cutting charges before excavating public roads for the installation, repair or replacement of underground infrastructure, including gas, water and other utility lines. The money is intended to finance the restoration and resurfacing of roads once such work is completed.
The committee was informed that Sui Southern Gas Company (SSGC) alone had paid approximately Rs11.9 billion in advance to the Karachi Metropolitan Corporation (KMC), town municipal corporations and cantonment boards for road cutting and subsequent restoration work.
Despite the substantial payments, officials told the committee that many roads affected by excavation remained in poor condition and had not been properly repaired by the civic agencies responsible for their maintenance.
The PAC consequently sought a detailed breakdown of the funds received by each town and other relevant civic bodies, along with records showing where and how the money had been spent.
During its examination of audit objections concerning Jinnah Town, the committee was informed by the municipal commissioner that the town had received around Rs 800 million in road-cutting charges.
Officials said tender notices worth approximately Rs 300 million had subsequently been issued for road construction and other development projects.
Khuhro asked officials to provide the committee with a complete list of the schemes being undertaken through these funds. However, local government and town officials were unable to immediately produce comprehensive records detailing the receipts and expenditures.
The lack of complete documentation prompted further scrutiny from the committee, which directed the Sindh Local Government Department to establish an effective mechanism for monitoring development projects undertaken by the city’s towns.
The PAC stressed the need for greater oversight of public funds, particularly money collected specifically for restoring infrastructure damaged during utility work.
PAC Questions Rs 1.9 Million Manhole Cover Purchase
In a separate matter, the committee questioned Jinnah Town officials over a reported expenditure of Rs 1.9 million on manhole covers, which were said to have been purchased at a cost of around Rs 5,000 each.
Officials informed the committee that the covers had been installed in UC-5, UC-7 and UC-8.
Khuhro questioned why open manholes continued to pose a danger to residents, particularly children, despite funds having been spent on purchasing and installing covers.
The PAC subsequently sought detailed records relating to the procurement and installation of the manhole covers.
The committee’s scrutiny has brought renewed attention to the management of road-cutting charges and municipal development funds in Karachi, as it seeks documentation showing whether money collected from utility companies has been used for its intended purpose.

Karachi | ReNews Pakistan

Karachi | ReNews Pakistan
Pakistan’s real estate investment trust sector is gaining momentum, with 18 REIT funds established and projects worth more than Rs 2 trillion under development, according to Arif Habib Dolmen REIT Management Company CEO Muhammad Ijaz.

Ijaz said REITs could help formalise Pakistan’s largely informal real estate sector while enabling investors with relatively modest capital to participate in property related businesses.

He said the REIT framework addressed two major challenges associated with real estate investment, namely the need for substantial capital and the limited liquidity of property assets.

Under the model, real estate assets are divided into units that can be purchased by investors, allowing both small and large investors to participate in property related investments.

Ijaz said Dolmen City REIT, Pakistan’s first REIT, had an asset value of around Rs 22 billion when it was launched, with 2.2 billion units issued at Rs10 each. He said investors could participate with Rs 5,000 while those with much larger amounts could also invest through the same structure.

He explained that the legal title of REIT assets remained with the trustee, while investors held REIT units representing their ownership interest. Trustees are licensed entities, including the Central Depository Company and Digital Custodian Company, while REIT management companies are responsible for managing the underlying businesses and assets.

Ijaz said five REITs were currently listed on the Pakistan Stock Exchange, with additional listings expected. Rental REITs are required to be listed within their first year, while developmental and hybrid REITs are required to be listed within three years.

He distinguished between rental and developmental REITs, saying rental REITs generally acquire completed properties and generate income by leasing them, while developmental REITs develop land or projects for sale or lease.

According to Ijaz, REITs are required to distribute 90% of distributable income among unit holders. He said Dolmen City REIT initially offered a yield of around 10%, while investors who purchased units at around Rs11 later saw a substantial increase in yield as the unit price rose.

Under the model, investors can purchase a fractional share of a property. For example, an apartment measuring 1,800 square feet and valued at Rs 30 million could be divided into 100 square foot shares worth Rs 1.8 million each.

Ijaz said investors could accumulate additional shares over time and potentially sell them later. The model is initially being developed in Naya Nazimabad, with ownership and rental arrangements managed through institutional and contractual structures.

He said the REIT sector was no longer limited to Karachi. Of the 18 REIT funds, 10 were in Karachi while eight were in Lahore and Islamabad. Projects include developments associated with Naya Nazimabad, Surjani Town, Lahore’s Central Business District, Ravi Urban Development Authority and Rifah Medical City.

Ijaz said a 150 acre project in Surjani Town had been divided into two REIT funds focusing on horizontal and vertical development, with an emphasis on environmentally friendly urban development.

Ijaz also called for greater availability of mortgage finance and institutional funding for professionally managed housing projects. He said the build to rent model could emerge as an important business model, allowing people to access professionally managed rental housing without bearing the financial and administrative burden of constructing their own homes.

He said Pakistan’s real estate sector had significant potential if supported by better taxation policies, institutional investment and professional project management.

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