KARACHI: A Shariah-compliant Pakistani property investment offering was oversubscribed eight times, its manager said on Wednesday, with the scheme attracting total bids of Rs4.5 billion ($16.2 million).

Naya Nazimabad Apartment REIT, or NNAR, allows investors to invest in large residential property developments without buying an apartment, plot or building themselves. Investors instead buy units representing a stake in a professionally managed pool of property projects.

The book-building process attracted significant demand, with the issue hitting the upper ceiling of Rs23 per unit, representing a 28% increase over the floor price. The offering successfully raised Rs1 billion ($3.6 million) in equity.

After successful completion of the book-building process, the general public subscription is scheduled for September 7 and 8. The public portion represents 25% of the total offer, with the remaining 75% allocated through the book-building process, according to Arif Habib Dolmen REIT Management Limited, which manages NNAR with Arif Habib Limited as lead manager.

“The overwhelming response to Naya Nazimabad Apartments REIT is a strong endorsement of the confidence investors have placed in the offering,” Shahid Ali Habib, CEO of Arif Habib Limited, said in a statement.

"The eight-times oversubscription and demand at the upper price ceiling are particularly encouraging and reinforce our belief in the potential of well-structured real estate investment products in Pakistan."

Pakistan has sought to deepen its Islamic capital markets as part of a broader shift toward Shariah-compliant finance. Islamic banking assets reached Rs14.47 trillion ($51.9 billion) at the end of 2025, accounting for 22.9 percent of the country's total banking assets, according to official data.

The push has gained additional impetus from a constitutional requirement for Pakistan to eliminate interest, or riba, from its economy by the end of 2027, increasing the importance of developing Shariah-compliant banking and investment products.

Unlike a rental property fund, which primarily earns money by collecting rent, NNAR is a developmental real estate investment trust. Its underlying projects develop residential properties for sale, with the proceeds and gains generated by those developments accruing to the investment scheme and its unitholders.

For Pakistan, where property has traditionally been a major destination for household savings, such funds offer investors exposure to real estate without requiring the capital needed to purchase an entire property. A stock-market listing also allows investors to buy and sell their units, providing greater liquidity than directly owning an apartment or plot.

NNAR is structured to comply with Islamic financial principles, meaning its investments and financing must avoid interest and other activities prohibited under Shariah law. The structure provides another avenue into property for investors seeking Shariah-compliant financial products, according to its manager.

The scheme holds three real estate portfolios across Karachi and Lahore with a cumulative assessed value of approximately Rs20.46 billion ($73.4 million) as of April 2026.

"The successful book building further strengthens the role of REITs in broadening access to real estate as an investable asset class and supporting the continued development of Pakistan’s capital markets," NNAR manager Arif Habib Dolmen REIT Management Limited said.