Investors agree to pour Rs225b into housing, hotel projects

Country faces shortage of about 10 million housing units

KARACHI: Foreign and local investors have agreed to inject Rs225 billion into the real estate market of Pakistan keeping in view the growing demand for houses and hotels in the country.

Pakistan, which is home to around 200 million people, is facing a shortage of about 10 million housing units as the pace of construction has remained much slower than the growth of population since long.

The huge gap has made housing business very profitable and kept attracting investors towards the sector. Overseas Pakistanis have been a big source of investment in the country's real estate market.



"The newly announced investment is, however, less than half of what investors committed last year," Association of Builders and Developers (ABAD) Chairman Mohsin Sheikhani said at the end of the three-day ABAD Expo 2017.

At last year's expo, the property builders and developers had signed memoranda of understanding for investments worth Rs500 billion.

"The drop in investment commitments is the result of recent political uncertainly (Panama Papers case against Nawaz Sharif and his family)," he said.

Many investors had put on hold their investment decisions waiting for clarity in the political scenario, he said.

Sheikhani urged the government to frame policies in a bid to turn unplanned cities into well-planned urban centres as ill-planning had left many major cities backward.

"Around 12 million people are living in slums across the country; half of the Karachi city has been built unplanned," he said.

Sheikhani said a Canadian company was constructing a chain of hotels named Holiday Express. It is establishing five hotels in major cities, including Islamabad and Karachi.

Apart from this, an ABAD member had reached an understanding with a UK-based company for encouraging investment in Pakistan's property market, he said.

Speaking at the expo, Sindh Chief Minister Syed Murad Ali Shah said the unplanned construction had given birth to a number of issues in Karachi, including a poor sewerage system and lack of drinking water.

He drew a link between the unplanned construction and terrorism in the city, saying terrorists had many a time also held hostage the builders and developers to extort money.



He, however, emphasised that the government had been able to overcome terrorism and was paving the way for planned housing schemes.

Shah pointed out that the Sindh government had spent Rs45 billion on development works in the previous fiscal year ended June 30, 2016, adding it would spend a similar amount on new development projects in the current fiscal year as well.

(This is an updated version. In the previous version there was an error, which has now been corrected)

Published in The Express Tribune, August 15^th, 2017.

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