ISLAMABAD: Pakistan’s Ijara Capital Partners Ltd. has launched a private equity fund to raise five billion rupees ($29 million) to invest in real estate projects as Prime Minister Imran Khan encourages a construction boom, Bloomberg reported. 

The South Asian nation is seeing a flurry of activity in its real estate sector after Khan selected the construction industry as a catalyst to boost economic growth. The nation is offering subsidies for low-cost houses and banks have been asked to increase their credit exposure for the industry to 5% of their loan portfolios. The country saw multiple REIT offerings for the first time last year.

The fund will be raised and deployed in multiple projects within six months, Farrukh Ansari, chief executive officer at Ijara Capital, said in an interview to Bloomberg. It will offer an internal rate of return between 25% and 30%.

“Real estate is a very attractive sector in terms of returns,” Ansari said. “There are not a lot of investment instruments to invest in transparently in Pakistan.”

The fund called Tameer Fund has seen interest from foreign investors, said Ansari. The amount raised will be used to fund land acquisitions and project development, he said