Shams ul Nisa

Dolmen City REIT (DCR) has demonstrated impressive resilience and growth, with its unit price soaring to Rs17.50 during the first quarter of the ongoing fiscal year 2024-25 compared to the same period of FY24, reports WealthPK.

This remarkable increase reflects growing investor confidence in the real estate investment trust. The surge in the unit price highlights the market's positive reception of DCR's performance and future prospects. DCR has delivered strong financial results for the quarter ending September 30, 2024. Its rental income reached Rs1.286 billion, an uptick from Rs1.200 billion in the same period last year, driven by consistently high occupancy rates of over 98%.

The weighted average lease expiry (WALE) for Dolmen Mall is approximately 2.62 years, and for Harbour Front, it is around 4.11 years, indicating a stable and predictable rental income stream. Additionally, the net operating income for the quarter stood at Rs1.065 billion, reflecting efficient cost management despite rising administrative expenses. Furthermore, DCR's distributable profit reached Rs1.113 billion, underscoring its robust financial performance. Dolmen City REIT was established on January 20, 2015.

It operates under the Real Estate Investment Trust Regulations, 2015, which are issued and updated periodically by the Securities & Exchange Commission of Pakistan (SECP). The surge in REIT’s unit price is closely tied to growing investor interest, as reflected in the increased average daily traded volume, which rose from 341,419 units in 1QFY24 to 367,176 units in 1QFY25. This uptick indicates a rising demand for DCR units, driven by its strong performance and strategic position in Pakistan’s real estate market.

Additionally, DCR's Net Asset Value (NAV) was reported at Rs32.41 per unit as of September 30, 2024, with the units trading at a significant discount of about 47.12% to NAV. This suggests that investors are recognising the potential value of DCR, even amid broader market fluctuations, which further fuels their confidence in the REIT’s growth prospects. Furthermore, the demand for premium office and retail spaces in Pakistan remains strong, fuelled by urbanisation and a growing middle class seeking modern shopping and corporate environments.

The booming technology sector, with a rise in startups, has further increased the need for innovative office spaces designed to encourage collaboration. Moreover, the DCR’s prime properties, Dolmen Mall Clifton and Harbour Front, are strategically situated in Karachi’s affluent areas, making them attractive destinations for both shoppers and businesses. Dolmen Mall, in particular, has set a new standard for retail in Pakistan, offering over 130 retail outlets and a wide variety of dining options, creating a world-class shopping experience. Additionally, DCR stands out as Pakistan's first Shariah-compliant REIT, ensuring that all investments align with Islamic finance principles.

This commitment enhances its appeal to ethical investors, with regular affirmations from its Shariah Advisory Board reinforcing the integrity of its operations. DCR is well-positioned to leverage emerging real estate trends, focusing on flexible, customer-centric environments to meet evolving consumer demands for experiential retail and modern workspaces. DCR's record unit price, supported by urbanisation, strategic property enhancements, and Shariah compliance, underscores its strong performance and investor confidence in its long-term growth strategy, solidifying its leadership in Pakistan's real estate sector.

Credit: INP-WealthPk