^{Korangi road-Karachi Pakistan [photo credits to hassamq7 via flickr]}

With an estimated shortfall in housing construction of 270,000 units, it would seem that Pakistan is ripe for foreign investment in its real estate market.

Problems facing the property sector in Pakistan are very low rental yields, adverse tenancy laws, absence of title to property and high property taxes. However, Pakistan’s Securities & Exchange Commission (SECP) has been considering the regulatory framework for Real Estate Investment Trusts since 2005. The latest news is that the SECP has made public its draft recommendations for the framework. The SECP has now embarked on a consultation exercise with the property sector on the subject but there still doesn’t appear to be a target date for the advent of REITs. Furthermore the draft recommendations do not seem to shed any light on subjects such as foreign and non-resident holdings in REITs and the repatriation of dividends.

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