Press Release

VIS reaffirms REIT Rating of Dolmen City REIT (the Scheme)

Karachi, October 25, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed Rental Real Estate Investment Trust (REIT) Fund Rating of Dolmen City REIT (DCR) at ‘AAA (rr)’ (Triple A Rental (Rental REIT)). The Rental REIT rating of ‘AAA (rr)’ denotes highest capacity to maintain stable rental income. Risk factors impacting value of REIT assets are negligible over the foreseeable future. Outlook on the assigned rating is ‘Stable’. The assigned rating is in line with the updated REIT Fund methodology which can be found on our website or on the link provided below. Previous rating action was announced on September 22, 2021.

The assigned rating incorporates the profile of Dolmen and Arif Habib Groups having sound financial profile and experience in the real estate sector. The rating also derives strength from the competitive advantage of the REIT property based on its location, provision of amenities, high quality maintenance services and security; the REIT property comprises Harbour Front (office space), Dolmen City Mall (retail mall) and ancillary parking space. The business risk profile is supported by diversified tenant profile and strong footfall metrics. Comfort is drawn from occupancy levels remaining above 90% even amidst subdued economic activity.

Given the improvement in footfall metrics, rental waivers were weaned off, as a result of which DCR’s revenue base grew by 23% in FY22. As the operational overheads depicted a relatively controlled uptick, DCR’s operational profit (profit before change in fair value of investment property) was up 21.8% YoY. Given the improved profitability, DCR announced a dividend of 15% for FY22 (FY21: 12.4%). Rating incorporates unleveraged capital structure of DCR, given no debt on its books.

For further information on this rating announcement, please contact Mr. Arsal Ayub, CFA or the undersigned (Ext: 207) at (021) 35311861-66 or email at info@vis.com.pk.






Sara Ahmed
Director

Applicable Rating Criteria: Real Estate Investment Trust (REIT) Fund (July 2022)
https://docs.vis.com.pk/docs/REITMethodology-Final-Dec2021(Final).pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .