SECP Advises People Not to Invest through Real Estate Start-up
And seeing the tremendous growth and lucrative returns on investment, every second Pakistani wants to invest in real estate but the issue is that minimum investment required for areas that offers better returns is way too high for most of the individuals.
Arazi Ventures has introduced NEST, a technology-enabled platform to help connect individual investors with real estate investment opportunities in Pakistan. However, it is also learnt that Arazi Ventures has not approached the SECP for approval of any such scheme, the SECP categorically said in a statement issued last week.
The Securities and Exchange Commission of Pakistan (SECP) has announced that currently no regulatory framework exists in the country for permitting crowd funding – an initiative taken by above-mentioned company few weeks ago, as it fears that people could lose money by investing blindly in any such venture.
The corporate sector regulator sprang into action after Arazi Ventures unveiled that NEST start-up would offer an entry-level ticket at as low as Rs50,000 to own a small stake in a managed and pre-vetted commercial or residential property.
On the contrary, Arazi Ventures CEO Umair Sheikh also accepted that the company had not yet got approval of the SECP. "We plan to turn NEST into a robust crowd funding platform for real estate as soon as we have green signal from the Securities and Exchange Commission of Pakistan," he said. "For now, we are only accepting offers from accredited and seasoned investors, who understand the risks involved in private investments."
NEST is a real estate matchmaking service that aims to connect, facilitate and enable like-minded individuals to pool their resources and acquire properties that otherwise would have been out of their reach. The properties will then be owned by the individuals or the vehicle of their choice."
While the Securities and Exchange Commission of Pakistan (SECP) has advised people to take precaution and not to invest in any such company until its credentials had not been verified from the regulator.
CEO of Arazi Ventures also stated that the company would not engage in offering investment advisory services or facilitating crowd funding until the SECP regulations allow it. He also expressed his confidence that the SECP and other concerned authorities will devise a legal framework to allow small investors to benefit from real estate opportunities that offer lucrative returns while being 100% secure and Sharia-complaint.