Tehran Municipality on Wednesday its first real estate offer at the Iran Mercantile Exchange.
It included two apartments, which were bought in less than an hour after the offer was seen on the IME bulletin board, the Securities and Exchange News Agency reported.
No details of the sale were available.
IME is a commodities exchange in Tehran founded in 2006 to host deals in farm, industrial and petrochemical products in the spot and futures markets.
Commenting on the initiative, Hassan Mohammad Hassanzadeh, head of TM real estate management department, said offering real estate via the IME helps underpin transparency in divesting assets of the municipality.
He spoke about plans that require the TM to secure 10% of its revenue from selling excess property.
The capital market is gaining traction for cash-strapped municipalities seeking funds to pay for expansion projects. In late May, Abolfazl Fallah, the economic deputy chief at TM, said the municipality has decided to buy raw material and machinery for urban projects from the Iran Mercantile Exchange.
Fallah said the move would help improve financial transparency in the municipality, help reduce costs and eliminate middlemen and intermediaries.
Earlier in the week, the Securities and Exchange Organization (SEO) said it is working to diversify methods to help fund municipalities.
“Up until now, funding for municipalities was largely through participatory bonds, which now is not enough to meet all the needs of municipalities for urban projects,” Majid Eshqi, the SEO chief said.
Eshqi underlined the empty coffers of municipalities, saying that in some cases they were forced to sell their assets to pay bills.
He recalled a memorandum of understanding signed by the SEO and Tehran’s municipality that calls for developing new instruments to urban projects.
Based on the MoU, municipalities can use assorted methods to secure funds, like selling bonds and setting up Real Estate Investment Trusts (REITs).
