#1ASINDOAD'S (ASKEA Dolmen Mall BWE CHER ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED Pakistan - An attractive Investment Destination#2Pakistan Stock Market Return Profile ARIF HABIB GROUP Pakistan has offered impressive rate of return to investors of securities market consisting of companies from industries, banking and financial services as well as investors of real estate sector Exhibit: KSE100 Index Returns 30% PKR Based Return USD Based Return 25.4% 25% 20.7% 20% 16.9% 15% Average annual rate of return in dollar term; 20 Year Average: 20.7% 10.1% 10% 5% 10 Year Average: 10.1% 0% 20 Y Average 10 Y Average 05 Y Average 05 Year Average: -10.5% -5% -0.9% -10% -10.5% -15% Real estate investment return are estimated to be in excess of 20% per annum. Source (s): PSX, SBP, AHL Research 1#3Pakistan Equities Valuation Despite highest returns, value of companies are available at a very attractive levels. Below is the comparison of the value vis-à-vis regional markets Exhibit: Forward Estimates Country Indonesia India Vietnam Philippines Sri Lanka Thailand China Taiwan South Korea Peer Average Pakistan Prem/(Disc) Source (s): Bloomberg, AHL Research DY (%) PE (x) PB (x) 2.51 14.2 2.0 1.42 20.5 3.1 1.39 10.8 1.9 1.91 13.7 1.5 2.32 12.5 2.9 3.04 15.4 1.6 2.93 8.3 1.1 4.21 12.1 2.0 2.10 9.1 0.9 2.4% 12.9 1.9 9.0% 4.8 0.8 -73.1% -62.9% -57.6% ARIF HABIB GROUP 2#4ARIF HABIB GROUP - Owns a Diversified Investment Portfolio Financial Services Industries • Securities Brokerage • Fertiliser • Steel Cement & Concrete • Renewable Energy • Investment Banking • Asset Management • REIT Management • Commodities Futures Brokerage Real Estate Development and Project Management ASSETS OF USD 2,082 MN Cement, USD Energy, USD 108 mn Real Estate, USD 191 mn 256 mn Steel, USD 203 mn ARIF HABIB GROUP Financial Services, USD 64 mn PSX Net Assets FY21 $972 Mn Revenue FY21 $1,164 Mn Profit After Tax FY21 $167 Mn Project Debt: Equity 24:76 Fertiliser, USD 1,260 mn Market Cap of 8 listed entities $775 Mn ASIAN PAKISTAN STOCK EXCHANGE LIMITED Top 25 Companies Award Winner Business ASIAMONEY FinanceAsia Awards 2017 CFA Society Pakistan mea SAFE SOUTH ASIAN FEDERATION OF EXCHANGES ASSET AWARDS Asset TRIPLE A#5Strategic Priorities, Core Competencies, Future Plans Identify High Growth Sector Select Partner Raise Capital Systems, management & controls Deliver Success ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED We pride ourselves in creating successful strategic synergies with partners to deliver success • Competence based comparative advantage • Data driven, research based timely decision making ● Cohesive, experienced management team ● Total transparency in operations ● • Optimal risk, return & efficiency balance High Growth Sectors identified for future focus are: • Real Estate Development . Agriculture ● Mining Fintech 4#6Strategic Priorities, Core Competencies, Future Plans ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED Joint Investment Partners MARUBENI ITOCHU STEEL MCB MITSUBISHI LLUCKY CEMENT engro siddiqsons GROUP #dolmen LIBERTY BUILDING A BETTER FUTURE Fatima Group BANK OF AMERICA H ICBC all J.P.Morgan CREDIT SUISSE ICD OPEC FUND FOR FID Islamic Corporation for the Development of the Private Sector INTERNATIONAL DEG DEG Deutsche Investitions- und Entwicklungsgesellschaft mbH 5#7ARIF HABIB DOLMEN REIT MANAGEMENT We focus on fully documented, sizeable and commercially viable real estate transactions Our differentiation: • Extensive research for identifying the optimal Real Estate Product Mix • Working closely with project teams ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED ● Optimal financial structuring A legacy of "firsts" Dolmen City REIT: The first listed REIT in South Asia Cumulative project size of 5 registered REITs and 8 REITS in process of registration is PKR 550 billion (USD 3 bn) Dolmen City: Pakistan's first international standard mall and office space mixed use development Naya Nazimabad: Pakistan's first brownfield residential development bringing A grade housing to the middle income segment Sapphire Bay Islamic Development REIT: Pakistan's first Shariah compliant PPP REIT Silk Islamic Development REIT: Pakistan's first Shariah Compliant development REIT Dolmen City REIT Nature of the Scheme Perpetual, Rated, Listed, Closed-end Shariah Compliant Rental REIT • Dolmen Mall Clifton 547,924 sq.ft. Real Estate • The Harbour Front Total 256,724 sq.ft. 804,648 sq.ft. Fund Size (at inception) Rating Occupancy PKR 22,237 Million (US$ 123.54 million) "AAA(rr)" by VIS Credit Rating Agency Dolmen Mall Clifton 96.80% 90.00% • . The Harbour Front Net Asset Value PKR 26.62 per unit (December 2021) Dividend Yield (on face value) 10.40% (June 2016) 12.50% (June 2020) 11.50% (June 2017) 12.40% (June 2021) 12.00% (June 2018) 13.20% (June 2019) 6#8Environmental, Social, and Governance Focus ESG is fundamentally intertwined in every aspect of our business All our real estate projects focus on lifestyle amenities and efficient design • • . Special focus on Sports, Health, Education and a community environment Designs ensure maximum natural ventilation and day light harvesting All daily requirements for residents are within walking distance to minimize the use of motorized transport • Water efficiency is built in through rain water harvesting and grey water storage • Strict adherence to Code of Corporate Governance . Pakarab Fertilizers - First Pakistani company to earn and sell Carbon Credits in the international market ● Sachal Wind Power Project - Total capacity of 49.5MW which corresponds to an annual production of approximately 136.5 GW. ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED 7#980 Government Creating an Enabling Environment Federal Government: • Gave tax incentives to developers and real estate buyers • Designed a program to offer markup subsidy to end buyers • Established Naya Pakistan Housing & Development Authority (NAPHDA) • Established Real Estate Regulatory Authority (RERA) in ICT . Implemented AML/CFT regulations • Provincial Governments rationalized transfer duties and taxes • Federal Board of Revenue removed disincentives for REITS • State Bank of Pakistan assigned credit targets for the construction sector; removed disincentives for investment in REITS ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED • Securities & Exchange Commission of Pakistan amended the REIT Regulations to make them more conducive#10For further information and queries: Muhammad Ejaz Chief Executive Officer ARIF HABIB DOLMEN Arif Habib Dolmen REIT Management REIT MANAGEMENT LIMITED +92-300-8275203 [email protected] https://www.arifhabib.com.pk https://www.arifhabibdolmenreit.com#11ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED Annexures - Recent Regulatory changes favouring REITS#12Recent Regulatory changes favouring REITS State Bank of Pakistan - Changes in Prudential Regulations BPRD Circular 07 of 2021 Regulation R-6 • ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED ATE Aggregate Investment limit in units of REIT increased from 10% to 15% of equity of the bank, exclusive of aggregate equity investment limit of 30% of their equity as mentioned in sub rule 1B(i) IH&SMEFD Circular 10 of 2020 Banks are assigned mandatory financing targets for housing & construction of buildings (Residential and Non-Residential) of at least 5% of their domestic private sector advances by December 2021 IH&SMEFD Circular 04 of 2021 as amended through Circular 13 of 2021 Investment in Units issued by REITS and Debt Instruments issued by REITs shall count towards Banks' mandatory financing targets for housing & construction of 5% of their domestic private sector advances BPRD Circular 18 of 2021 Banks' investment in REITs will attract a uniform risk weight of 100% reduced from 200% BAN#13• Recent Regulatory changes favouring REITS SECP - Changes to REIT Regulations (2015) Concept of PPP-REITS introduced; Acquisition of additional Real Estate in existing REITS allowed; Transaction level approvals from SECP - No more required; ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED છે ΔΙΔ سکیورٹیز اینا SECP Transaction process flows improved REIT Borrowing Limits Uncapped; Investment in Special Purpose Vehicle 'SPV' allowed under REIT structure; Banks are assigned mandatory financing targets for housing & construction of buildings (Residential and Non-Residential) of at least 5% of their domestic private sector advances by December 2021#14Recent Regulatory changes favouring REITS Measures taken by Federal & Provincial Government FBR introduced the following key changes in taxation framework: Capital Gains arising to seller of real estate to a REIT Scheme is exempt till June 2023; ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED Tax on Dividend Income in the hand of REIT Unit holders reduced from 25% to 15% in line with the rate applicable on Mutual Funds; Provincial Government measures: ΔΙΔ سکیورٹیز اینا SECP ● Stamp Duty rationalized; • Registration fee and Capital Value Tax applicable at the time of immovable property transfer abolished These recent changes have created a conducive environment for REITS in Pakistan#15● . Steps Taken by The Government GOVERNMENT OF m ARIF HABIB DOLMEN PAKISTAN Setting up of Naya Pakistan Housing and Development Authority (NAPHDA) and making it operational. Fixed Tax Regime (FTR) for builders and developers along with amnesty for investment in the sector. Subsidy (both direct and interest rate) for affordable housing. Lower tax rate for banks and financial institutions for mortgage financing. Concerted efforts are being made to set up a uniform system for developer finance and mortgage finance in the country; a carrot and stick policy has been introduced by SBP to encourage banks to participate. • Introduction of Real Estate Regulatory Authority (RERA) initially for ICT. REIT MANAGEMENT LIMITED ● Regulations for compliance with FATF prescription.#16Prime Minister's Construction Package 2020 PRIME MINISTER'S OFFICE ISLAMIC REPUBLIC OF PAKISTAN ARIF HABIB DOLMEN Construction Sector declared as Industry easing import of plant and machinery used in construction activity • Introduction of Fixed Tax Regime 'FTR' for Builders and Developers. For low cost housing projects by NAPHDA / approved by NAPHDA, tax further reduced by 90% ● ● ● No question would be asked regarding the source of income source for people who will be investing in real estate till Dec 2020 Tax credit under section 236K (Purchase of Immovable property) utilized in a project REIT MANAGEMENT LIMITED No withholding taxes 'WHT' on materials except for cement and steel and No WHT on services except those rendered by companies One-time exemption from Capital Gains on personal accommodation not exceeding 500 square yards (house) and 4,000 square feet (flat) Capital Value Tax exempted in ICT as done by Sindh, Punjab and KPK Reduction in Project Approval Time by all provincial governments/respective development authorities by issuing NOCs, automation and concurrent processing of approvals