Real estate: How the Arsalan Iftikhar case affected Bahria Town
Bahria Town may have been accused of having several questionable business practises, but its chairman, Malik Riaz, certainly knows how to handle reputational risk: the real estate development company, one of Pakistan’s largest, was able to recover within months from the hit to sales during the Arsalan Iftikhar scandal in large part due to its heavy blitz of advertising.
The Supreme Court case surrounding corruption allegations levelled by Riaz – implicating both himself and the son of Chief Justice Iftikhar Muhammad Chaudhry, Arsalan Iftikhar – brought to light Bahria Town and the many questionable business practises of the company. But while the episode may have temporarily dented interest in Bahria Town properties, it did not have a measurable impact on prices, according to data compiled by Zameen, Pakistan’s largest online real estate database.
Zameen used the percentage of searches on its website regarding Bahria Town as a proxy for interest in buying property developed by the company, which allowed them to be able to control for seasonal variations in interest as well. For price data, they used final listing price data for every property listed on their website. The results of the analysis present an interesting picture.
During the first five months of 2012, interest in Bahria Town properties, particularly in Lahore, was steadily rising. Then, as the Supreme Court began hearings into the corruption allegations in June, interest plummeted. As a percentage of the total volume of traffic on Zameen, Bahria Town’s share shrank from 5.48% to 4.53% within one month.
“While that difference does not sound like a lot, it represents thousands and thousands of clients moving away from Bahria Town,” said Shaista Zulfiqar, a marketing manager at Zameen.
The data corroborates Zulfiqar’s view. The number of unique searches for Bahria Town on the website went down by almost 23% between May and August of this year.
But there was another interesting, and somewhat counterintuitive, trend that Zameen found in its data: even at the height of the corruption scandal, when Bahria Town’s name was associated with unethical and illegal actions on the nightly news every day, prices for many Bahria Town properties – especially in Lahore – remained relatively steady and recovered strongly soon after the scandal was no longer dominant in the news.
This is not to say that some properties were not badly affected. Dawn reported that Bahria Enclave in Rawalpindi saw prices plummet by as much as 20% during the height of the scandal. But the more established of Bahria Town’s projects and properties appear to have weathered the storm rather well. Prices appear to have fallen by an average of around 1.7% for the Lahore developments, and by September had rebounded to even higher than their pre-scandal levels.
And interest in Bahria Town properties now appears to have also crossed its pre-scandal peak, touching 6.74% of total searches on Zameen in October so far. “It is an astounding figure which represents that the rise in people’s interest in Bahria Town is almost twice as much as the setback it suffered in July,” said Zulfiqar. “Such a quick recovery says volumes about Bahria Town’s strength as a truly outclass project which came out of the mammoth controversy literally unscathed.”
Part of that resilience appears to have been the result of a massive advertising blitz that Bahria Town launched at the height of the scandal. It was often ironic to watch advertisements for Bahria Town properties on several news channels in the middle of a programme detailing allegations of the company’s questionable practises in creating those developments in the first place.
While that sort of marketing spree may be seen as brazen by some, it appears to have worked: prices for Bahria Town properties in Lahore are up by an average of 10.6% between May and August of this year. He may have been maligned in the media, and perhaps justifiably, but Malik Riaz and Bahria Town appear to be having the last laugh in the Arsalan Iftikhar scandal.
Published in The Express Tribune, October 23rd, 2012.
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@A Khan: Are u in PR section of Bahria town. Everyone knows that MR was a small contraactor who made his way by corruption and capturing govt land. The design and beautyt are ok but construction work is not of good quality. Bahrria enclave is locxated out of isb and still such hefty prices. Let's see when he gives possession
To all the fans of Malik Riaz and Bahria Town.......please don't compare him with Bill Gates........grabbing land through brute force and badmashi to construct a housing project, over-selling plots beyond the area of land available and pocketing the excess money, bribing the high-ups to obtain a connection for BT from alternative high transmission electricity line reserved only for hospitals and emergency services, greasing the palms of A-Z to get your way by any means, right or wrong, is certainly not entrepreneurship and nothing to be "celebrated" or to be proud of. By doing philanthropic work, he may at best be called the "Robin Hood of Pakistan".
Well, bravo to that thought, someone stood up to this madness. I have seen Behria, its a new pakistan and we are proud of what he has done in a short span of a decade. Only if Malik Raiz was given the reins of Pakistan in a dictactorian one man show, the destiny of Pakistan will change. He would turn Pakistan from the likes of his barren inhabitable lands into Gold and then then only vision of Quiad will bear fruition. Why does the CJ not take action against CM's daughter, well i tell you why, because this entire setup is a draconian marriage of convenience between all power holders. Money, Money and dirty Money, they cant seem to have enough of it while the final destination awaits in a 6 feet box, we are busy multiplying the only thing that will take us to unending doom.
We have to stigmatise Success in Pakistan, we can not see someone reaching the stars and in all our naive wisdom resort to "maligning" the people who make difference in Pakistan. I did some research, Newsweek International claims BT communities to be as good as the communities in developed world, well while the world celebrates Bill Gates we are still living in dark ages. before we can judge someone, have we every thought what we have done for the nation except expressing negativity and bad news. We are dying a death by our own hands, who would invest in a country like Pakistan and we are making sure that we leave no stone unturned to vilify all businessmen of Pakistan to ensure that the Capital takes its flight to the west, where there is security, respect and above all , Justice.
Bravo to Malik Raiz and Bahria Town for making an oasis free of loadsheeding, no crimes, A+ educational and recreational facilities & not to forget a new life style in Pakistan. Yes, I blame Bahria for the crime of : Not running out of Pakistan after being blackmailed, For making a better half of Pakistan & For proving 22,000 jobs and more than 250,000 indirect employment.
In the end, Truth prevails.
The higher you go, the harder you fall.
Bahria gets its money's worth in this supportive article. When Bahria folds and its investors suffer, lets hope zameen will be held accountable also. There is no corporate set up of Bahria. Its a one man show which will fade away with the passing of its main player.
How does the number of hits on the website signify interest? It could equally be people searching for news on the case who get directed to this website.
It just shows that the Pakistani people have become greedy, unethical and opportunists. Any civilized nation would boycott an unethical business like Bahrai but in Pakistan it is flourishing.
is this a news or Advertisement?