By Omer Bilal ISLAMABAD, Nov 05 (INP-WealthPK): The growth of the construction sector is gaining further momentum due to access to capital for developers, sellers and purchasers, and it is expected to grow aggressively over the next two years. The federal government looks at the construction industry as a catalyst to boost economic growth. The Securities and Exchange Commission of Pakistan (SECP) has granted approval for registration of the first Shariah-compliant Real Estate Investment Trust (REIT) Scheme in Pakistan under its REIT regulatory framework after introducing significant amendments. A REIT structure consists of trustees, management companies (RMC) and unit holders. The key purpose is to identify a project and raise public money through an initial public offering (IPO). As part of the Pakistani government vision to uplift the construction industry and to create employment opportunities as well as create an investor-friendly ecosystem for start-ups, the final round of consultations with stakeholders is in process, and market players were also on board while amendments were introduced. The REIT Scheme foresees the investments in undeveloped land, aiming to boost the sector of real estate, including construction, and sale of apartments/flats and commercial units by REIT management company for making income for unit holders. The subscription will give investors and stakeholders an opportunity to tap into Pakistan’s booming real estate. According to the latest data shared by SECP, amendments to the regulation were introduced in FY2020-21 after which three fresh applications were received by the (SECP) for the registration of management companies. Two RMCs already existed before the amendment, while three more companies (Dolmen City REIT, Silk Islamic Developmental REIT, Silk World Islamic REIT) got licences after the amendment. One company surrendered the licence despite the grant of one fresh RMC licence. In FY 2021-22, five fresh applications for permission to establish REIT companies were received. Three REIT scheme applications were received in the first quarter of FY 2021-22. SECP has been planning to raise 60 per cent of the targeted funds from foreign investors, and 30 per cent from domestic investors through REIT schemes as it provides enough confidence to foreign investors.   Moreover, as REITs are listed on the Pakistan Stock Exchange (PSX) and they generate their own income and own products, and therefore all taxable income is paid out as dividends to shareholders. The Real Estate Investment Trust Regulations, in 2015 offered Rental REIT – a scheme that invests in residential or commercial properties for generating rental income, Developmental REIT – a scheme that invests in construction or refurbishment of residential, commercial or industrial properties, and Hybrid REIT – a scheme that may include a mixed portfolio of rental and development properties. Growth in the REITs sector will lead to better paperwork, endorsement, governance, transparency and investor protection in the real estate sector and provide opportunities to foreign and local investors to benefit from growth in this field.