KARACHI: TPL Proper­ties is going to make an equity investment of Rs250 million in its subsidiary to benefit from “the upsurge in the real estate sector,” a regulatory filing said on Monday.

The real estate company already owns 80 per cent shares in HKC Ltd, which is one of its six subsidiaries. The company will acquire another 10pc shareholding in HKC at Rs263.72 a share — a move aimed at bringing “additional profit” to the company.

TPL Properties is part of TPL Corporation, a fast-growing technology group with many listed and non-listed companies in auto, insurance, real estate and security segments.

According to the financial accounts of TPL Properties, HKC acquires, develops and renovates real estate assets. The subsidiary held assets of Rs1.1 billion at the end of 2020. It had yet to generate any revenue, as per the most recent annual accounts, because it was still in the process of “initiation of developing the property”.

Speaking to Dawn, Company Secretary Danish Qazi said HKC owns a prime city centre plot on Hoshang Road near Frere Hall and Karachi Marriott Hotel, a most expensive commercial-residential area. “The company is in the process of launching an ultra-high-end luxury residential tower having world-class amenities comprising ground-plus-37 stories under the name of One Hoshang,” Mr Qazi said.

The subsidiary has been registering a net loss for the last three years. Its break-up value, which reflects the net worth of each individual segment if they were spun off from the parent company, was Rs20.15 per share. The company explained in its stock filing that the higher purchase price (Rs263.72 per share) was because an independent evaluation of the project’s underlying assets suggested a major increase in the market value.

TPL Properties recently completed the sale of Centrepoint — a 28-storey commercial building loca­ted off Shaheed-e-Millat Express­­­way in Karachi — to Bank AL Habib at an undisclosed price. The carrying price of Centrepoint on the most recent balance sheet of TPL Properties was Rs7.6bn. The company has stated it will use sale proceeds, which are likely to be higher than the carrying value, to invest in the “development of high-end office tower, hotel/service apartments and low-income housing projects”.

TPL Properties incurred an expense of Rs323m in the Jan-March quarter on behalf of HKC. Mr Qazi said the amount reflects the “soft cost” that includes design and project management consultancy as well as overheads.

Published in Dawn, July 20th, 2021