Karachi | ReNews Pakistan

The State Bank of Pakistan (SBP) has revised investment regulations for banks and development finance institutions (DFIs), introducing updated limits on investments in companies, startups, mutual funds, Real Estate Investment Trusts (REITs) and private equity funds.

According to a circular issued on October 23, 2026, the central bank has amended Regulation R 6 of the Prudential Regulations for Corporate and Commercial Banking to regulate equity investments and strengthen financial risk management.

Under the revised framework, the aggregate investment of a bank or DFI in the shares of a single company must not exceed the lower of 5% of its Tier-I capital or 10% of the investee company's paid-up shares.

The SBP has also specified investment limits for startups, including financial technology companies. Banks and DFIs may invest up to Rs 500 million or 5% of their Tier-I capital in a single startup, whichever is lower.

Investment ceilings have also been specified for mutual funds, Real Estate Investment Trusts and private equity funds. Under the revised rules, investment in any single fund must remain within the lower of 5% of the financial institution's Tier-I capital or 20% of the fund's total units.

The revised limits are also relevant to Pakistan's real estate investment sector, particularly REITs, which provide a regulated investment structure for property-related assets and projects.

The new framework could influence how banks allocate capital to real estate investment vehicles and other investment funds, depending on their available capital and existing investment exposure.

The central bank has further directed banks and DFIs to maintain formally approved policies governing equity investment decisions, supported by internal evaluation procedures.

These assessments must take into account the institution's financial position, overall investment portfolio, risk appetite, expected returns, professional expertise and business strategy, including an appropriate exit strategy.

Under the revised regulations, strategic investments and investments in mutual funds and private equity funds will also be included when calculating applicable aggregate investment limits.

However, units of the National Investment Trust (NIT) will remain excluded from these limits until its privatisation.

The SBP has specified that Tier-I capital calculations will be based on the preceding half-yearly reviewed or annual audited financial statements of the concerned bank or development finance institution.

The regulatory changes establish investment ceilings while requiring financial institutions to assess potential risks and expected returns before making equity investment decisions.

The central bank has clarified that all other existing instructions relating to the subject will remain unchanged.

Karachi | ReNews Pakistan

Pakistan Railways has initiated fresh measures to lease valuable commercial properties across Karachi, Hyderabad and Rawalpindi divisions as part of efforts to generate revenue from its land holdings and attract private investment in commercial real estate development.

According to auction notices issued by the railway authorities, properties comprising warehouses, existing and newly constructed shops, parking areas, marriage halls, marquees and other commercial facilities in Karachi Division are being offered for leasing through open public auctions.

The properties reportedly include warehouses at prime business locations in Karachi, particularly around I.I. Chundrigar Road, along with railway assets in Hyderabad and Tando Jam.

Under the proposed arrangements, certain properties are intended to be offered on 10-year leases.

Pakistan Railways published an official notice for the open auction of properties in Karachi Division on October 15, 2026, listing November 7, 2026, as the relevant closing date.

In a separate initiative, Pakistan Railways has proposed leasing 12 sites in Rawalpindi Division to private-sector investors and developers for the establishment of commercial projects.

The arrangements are being pursued through the Railway Estate Development and Marketing Company (REDAMCO), a subsidiary associated with the commercial management and development of railway properties.

According to the available advertisement, the Rawalpindi properties are being offered under a public-private partnership model for an initial lease period of 21 years, extendable by another 21 years, potentially bringing the total tenure to 42 years.

The proposed developments may include shopping plazas, commercial markets, corporate offices, retail outlets and factory outlets, depending on the approved land use and individual development arrangements.

The advertised conditions also provide for an annual rental escalation of eight percent on a compound basis and a 24-month mobilisation period following possession.

Construction activities would be required to comply with applicable local building regulations and other relevant approvals.

The leasing initiative forms part of Pakistan Railways' broader efforts to improve the commercial utilisation of its land assets and develop recurring revenue streams.

For private developers, construction companies and commercial investors, the proposed arrangements could provide opportunities to establish retail, office and mixed-use projects on strategically located railway land.

However, the publication of auction notices does not constitute the final award of leases. Successful bidders, contractual obligations, lease values and project implementation schedules will become clear after the relevant procurement and approval processes have been completed.

The latest measures follow an earlier successful auction of 125 commercial warehouses at Badami Bagh in Lahore.

According to an official government announcement issued on October 1, the annual lease revenue from those warehouses increased from Rs 72.2 million to Rs 331.08 million following the auction.

The department is also expected to receive an upfront security deposit of Rs 277.72 million under the revised arrangements.

The new leasing initiatives in Karachi, Hyderabad and Rawalpindi indicate a continued emphasis on commercial property development, asset monetisation and private-sector participation in the utilisation of Pakistan Railways' land holdings.

The eventual economic benefits will depend on competitive bidding, transparent agreements, investment commitments and the timely execution of approved commercial projects.

Karachi | ReNews Pakistan

The Sindh cabinet has approved the negotiated financing and implementation package for the $150 million Sindh Property Revenue Enhancement Programme (Sindh-PREP), advancing a major initiative to modernise urban property taxation and strengthen the financial management of local governments.

The programme seeks to improve the accuracy of urban property records, strengthen tax administration, increase revenue collection and develop more effective financial management systems for municipal institutions across the province.

The decision was taken during a provincial cabinet meeting chaired by Sindh Chief Minister Syed Murad Ali Shah on October 20, 2026.

According to the approved framework, one of the programme's principal objectives is to increase annual Urban Immovable Property Tax (UIPT) collection across Karachi's 25 Town Municipal Corporations from the current Rs 2.3 billion to a target of Rs 25.5 billion during implementation.

The proposed increase represents an additional Rs 23.2 billion in annual property tax revenue, equivalent to approximately 11 times the existing collection level.

However, the target is dependent on the successful implementation of administrative reforms, accurate property assessments, broader tax coverage and improved collection efficiency.

Under the proposed financing structure, the World Bank will provide $150 million, comprising $110 million through a Programme-for-Results (PforR) component and $40 million through Investment Project Financing (IPF).

The Programme-for-Results mechanism links financing to the achievement and verification of specified performance targets, while the investment financing component is intended to support technical systems, institutional development and reform implementation.

The Sindh government will also provide a counterpart contribution equivalent to 20 percent of the Programme-for-Results component.

The cabinet approved the negotiated package covering financing and implementation arrangements, the programme's results framework, performance verification procedures and environmental and social commitments.

Beyond Karachi, the initiative is intended to strengthen property tax administration in other urban areas of Sindh.

The programme includes institutional capacity-building measures for 45 selected local councils and the introduction of an Integrated Financial Management Information System.