KARACHI, July 15: Draft rules for the financial product – Real Estate Investment Trust (REIT) -- were launched in July 2007. The purpose was to provide investors an opportunity to invest in real estate, through a pooled investment vehicle, managed professionally by fund managers (licensed REIT Management Companies).

SECP noted in a statement issued on Tuesday that the real estate valuation (i.e. the lack of transparency) was a major bottleneck in the real estate sector in the country.

The regulator said that a strong REIT implementation team, which was multi-disciplinary and included a civil engineer and a real estate broker, had been built.

To study REIT licensing and evaluation, SECP said it had selected Malaysia as a relevant jurisdiction. Five officers of the commission were sent on a study tour to Malaysia in June to understand the problems and issues faced by the Securities Commission Malaysia in monitoring and regulation of Malaysian REITs.

A number of meetings were held with the Malaysian regulator and with the Institute of Surveyors to get a first hand knowledge of the REIT market in Malaysia.

A second group of five officers was leaving for Malaysia on Friday to visit valuers and REIT management companies operating in Malaysia.

Both the visits have been funded by a World Bank grant.