April 26, 2018 (BE2C2) — One of the Royal Group Companies of UAE’s Sheikh Saeed Bin Khalifa Al Nahyan, has reportedly shown interest in investing $3 billion in different sectors of Pakistan’s growing economy, with focus on its several hundred billion dollars worth real estate market.
Louai Mohammed Ali, chairman of the UAE-based BMS International Commercial Investment, made the commitment to invest in Pakistan’s real estate development, agriculture and fisheries, energy, hospitality and leisure, healthcare and education sectors, the Gulf Today reports.
Last week, State-owned Chinese construction company China Civil Engineering Construction Corporation (CCECC) announced it has entered into agreement with a local company to design-build Gwadar’s first luxury gated Golf Community. Valued at $265 million during the construction phase, the gated community will house an estimated 500,000 Chinese professionals expected to be living and working in Gwadar by 2022.
In December 2017, Egyptian tycoon Naguib Sawiris of Ora Developers and Pakistan’s Saif Group announced investing over $2 billion in real estate ventures in the capital named Islamabad 18. Profits from sale proceeds will be invested in other such ventures in other major cities of country and not repatriated overseas, sources told BE2C2.
Pakistan’s growing economy has remained instrumental to the country’s economic growth over the last several years. With a spend of about $5.2 billion on real estate construction backed up by price correction of up to 20 percent and major advancements in the overall industry dynamics, the property market has enabled strong returns among investors (local and foreign) compared to other investment avenues.
Also Read: Property Black Hole of Pakistan Economy
Total Foreign direct investment (FDI) into Pakistan surged 69 per cent to $4.45 billion in the nine months of FY2018, according to the central bank data.
With a population of almost 208 million people, Pakistan is suffering a shortage of 12 million houses. Karachi, with its huge population of nearly 20 million, has an annual shortage of 300,000 houses, and the number is further climbing due to steady arrival of more from upcountry as stability and security has been generally restored in what has been a restive city for more than a decade.
Business Insider has reported that prices of houses in Pakistan have doubled since 2011. The main reason behind this is that the investment ensures a return of 10-40% as demand for houses is growing rapidly.
Since real Estate sector will continue to grow as Pakistan’s urban population is projected to increase by 30 million in the next decade, the demand-supply curve is expected to remain skewed. Several international investors are therefore keen on exploring the real estate sector of the country.
Last year, Thomas Kramer, a U.S real estate mogul entered into an agreement with the CEO of Bahria Town, Riaz Malik to construct the first ever Island City in Karachi, named Bodha Island City. The project will require an estimated influx of $20 billion and is likely to complete in a span of 5–10 years, according to MerayLiyeZameen.com. It is also expected that a syndicate of foreign investors will be joining hands with the two real estate tycoons to assist in the successful execution of their upcoming project. The Bodha Island City further endorses the fact that Pakistan real estate is not less in competition than any country’s real estate industry and has become an investment hotspot for international investors, the website wrote in one of its reports.
Pakistani nationals have also been investing in UAE’s property market. They invested US$6.58 billion (Dh24.98 billion) in Dubai’s real estate through 19,955 transactions in the last four years (2014-2017), according to Dubai Land Department (DLD), making them the third largest non-Arab investor group by nationality.
The Royal Group Companies is also participating in the Dream Home Expo, Pakistan’s leading property and investment exhibition being held in Islamabad this week, to attract investments from Pakistanis in the UAE real estate market.