Dolmen City REIT Adopts New Rental Model Amid Occupancy Success

Karachi: Dolmen City REIT (DCR), Pakistan’s largest Real Estate Investment Trust, has transitioned to a new rental model, aiming to boost its financial performance despite facing a slight decline in net income. The company reported an increase in footfall at its Dolmen City Mall and steady occupancy rates across its properties, marking a positive shift in its operational strategy.

According to JS Global, DCR management recently revealed in an analyst briefing that Dolmen City Mall and the Harbor Front have occupancy levels of 97.6% and 97.2%, respectively. The transition to the new rental model involves tenants paying a base rent supplemented by a percentage of their revenue, with over half of the tenants already having moved to this model. This adjustment is part of DCR’s broader strategy to enhance rental income, which saw a 7% year-over-year increase in the first quarter of fiscal year 2025, alongside a 39% rise in marketing revenue.

Despite these gains, the company’s net income decreased by 2% year-over-year, attributed to higher administrative and operating expenses, including a one-time renovation charge. Looking ahead, DCR has multiple Real Estate Investment Trusts in development, with plans to list two of them. The company’s Net Asset Value as of September 2024 is Rs32.41 per unit, with the REIT currently trading at a 36% discount to its NAV.

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