1

3.80% 3.00%

3.70% 3.70% 4.10% 5.10%

0.00%1.00%2.00%3.00%4.00%5.00%6.00%

Five Years Real GDP Growth

BUSINESS & ECONOMY

2014 ECONOMIC PERFORMANCE AND FUTURE EXPECTATIONS

Despite historically poor macroeconomic indicators, FY 14

remained a year of economic improvement. Rupee

appreciation against major trading currencies paved a way

for declining economic indicators. In addition to that forex

reserves have shown tangible signs of improvement.

The Government contemplates GDP growth of 5.1 % for FY

15. However to achieve such ambitious figures, the

Government need to take bold steps to eradicate difficulties

in commodity producing sector, as well as industrial and

textile sector facing energy and gas outages problems.

In addition to that, perpetual political tensions in the second half of 2014 and a challenging

security situation are projected to continue to weigh on activity. Pakistan GDP has grown to

4.1 % in FY 14, which shows economic indicators are performing somewhat better than the

last year’s growth of 3.7 %. The reduction in policy rate will encourage private sector

investment and accelerate economic growth.

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8.5% 8.2% 7.7%

4.3% 3.9%

0.00%2.00%4.00%6.00%8.00%

10.00%

CPI Figures

14.0%

12.0%

10.0% 10.0% 9.5% 8.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Nov-10 Oct-11 Oct-12 Nov-13 Nov-14 Jan -15

5 Years Interest Rates Trend THE CENTRAL BANK CUTS DISCOUNT RATE IN

LINE WITH EXPECTATIONS

SBP cuts the discount rate by 100 BPS in January

2015. The discount rate has reduced to 8.5 % from 9.5

% due to lower inflationary pressure caused by falling

global oil prices. The reduction in interest rates will

play pivotal role in reviving the economy specifically

private sector would benefit from the scheme.

KSE-100 AMONG ONE OF THE BEST

PERFORMING STOCK MARKET

KSE-100 Index reached the historical highest point on

35,044 Points in the first week of February, crossing

the resistance level of 32,000 index points. The bullish

tendency is believed to be a result of cut down in

discount rate by 100 BPS and surge in weightage by

MSCI Frontier Index for Pakistan. Some other

economic indicators fueling optimism include soft CPI

figures 3.9% for the month of January 2015,

announcement of public firms privatization and IMF sixth review of fund release 518 Million.

The market was consolidated between 30,000 - 31,000 points in the period of July 14 –

October 14. The KSE-100 Index increased by 33 % from CY 2014-CY2015.

After generating positive returns for seven consecutive months- the market has started to

experience price correction phase, experiencing a decline of 2.70 % from 4rth February

historically highest index points. Analyst forecast market to remain range bound.

Automobile sector was the best performing sector in CY 2014, owing to the increasing sales

volume and Rupee appreciation against Yen. Cements sector expected to perform well due to

elected government public sector development program

and pro-construction mindset of Sharif government.

Analyst forecast market to remain range bound.

INFLATION REACHES TO 4.1 % IN JANUARY 2015

The global oil prices have slumped down to a five years

lowest point. The reduction in global oil prices caused CPI

to reduce down to 3.7 % in January 15 from 4.1 % in

December 14, which is the lowest figure recorded in 13 years. Inflation rate is projected to be

5.5 % for fiscal year 2015. The reduction in prices of commodities will gradually cause

demand-pull inflation. Due to dwindling inflationary pressure, the central bank decided to cut

the discount rate

3

17 18

15

11

14

0

5

10

15

20

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

FX Reserves In Billion US$ FOREX RESERVES SHOW

STRENGTHNING SIGNS

SBP Forex reserves fell slightly and PKR is

depreciated during the first quarter by 1.68 % against

US$. In FY 2014 Government issued Sukuk bonds in

international market worth US$ 1 Billion. The

significant investment in FIPI (Foreign Investors

Portfolio Investment) which stood at 382 Million US$

for CY 2014 also helped in improving exchange rate.

The Government is more likely to improve forex

reserves through IMF extended fund facility sixth

trench worth US$ 518 Million, and funding from

World Bank and ADB for social and infrastructural

improvements.

REAL ESTATE

SECP ISSUES DRAFT OF REAL ESTATE INVESTMENT TRUST REGULATIONS 2015

The public limited company that intends to undertake Real Estate Investment Trust (REIT)

management services shall have paid up capital of not less than Rs 50 million prior to applying

for license and submit documentary evidence that it has equity of at least Rs 50 million before

seeking approval of the Commission.

FIRST PAKISTAN REIT TO OFFER 9% DIVIDEND, STAKES

Pakistan’s first real estate investment trust will offer an initial 9 percent dividend and a 25

percent stake in the Dolmen City Real Estate Investment Trust when it sells shares in the next

three months. The trust is likely to increase the dividend in the fifth year. Considering that a

large portion of country’s real estate sector goes undocumented hence forming part of the

black economy, the development has been labeled as a quantum leap in making real estate

sector a transparent one, and as transparency evolves, better price discovery will be the fruit.

KEY FACTORS FOR RUDIMENTARY REIT (OPINION)

The development of first REIT is believed to be a positive step toward formalizing real estate

sector. An investor in REIT can profit in two-fold ways; one through dividend and second

when share value increases due to increase in the value of estate. Moreover, annual

escalation in rental ensures a steady income to investors in line with inflation. REITS are tax

exempt on distribution of 90 % profit.

AKD REIT Management and Arif Habib REIT Management companies are only two REIT

Companies in Pakistan. Since Pakistan will have rental REITs which develop projects with a

Currency Buying Selling

US$ 101.5 102.05

Euro 114.25 114.5

GBP 157 157.25

4

purpose of generating rental, its viability would primarily be dependent on the properties

occupancy ratio, tenants image, prime locations, efficient management and future expansion

plans.

MARKET INTELLIGENCE

HUBCO a publicly listed company and one of the major energy generation company will

relocate their registered office from Islamic Chamber to Ocean Mall. In Islamic Chamber,

HUBCO have occupied 1st floor sizing 3,860 Sq.ft and 3rd floor sizing 4,7000 Sq.ft.

HUBCO will move to 11th floor of Ocean Mall. The new registered office would be developed

on the area of approximately 10,400 Sq.ft. According to our resources HUBCO was in the

need of additional space due to which they will locate to Ocean Mall.

Key Features:

Prime Location

Retail and office development

30 Storey Building

5

PROJECT OVERVIEW

Project Name: Al TIJARA CENTER

Location: Sharah-e-Faisal

No of Storey: 16

Floor Plate: 16,200 Sq.ft

Parking Facility: Two Basement floors and 1st, 2nd & 3rd

floor allocate for parking

Building Class: B

Average Office Size (Sq.ft): 3,600, 4,600

Occupancy: Approximately 70 %

Prices offered PSF: 125

CAM Charges: 20

Completion: 2011