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Bloomberg: Egyptian Billionaire Eyes Further Pakistan Real Estate Projects

PDFChamp

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  • Naquib Sawiris is developing a $2b estate in Islamabad
  • Pakistan faces a housing shortage as its population expands

Naguib Sawiris

Photographer: Shawn Baldwin/Bloomberg

Egyptian billionaire Naguib Sawiris’s Ora Developers will next month start building a luxurious $2 billion housing estate on the outskirts of Islamabad and is eyeing further projects as it taps demand from overseas Pakistanis.

The ‘Eighteen Islamabad’ development will feature more than 1,000 homes, a golf course and a mall on 2.25 million square meters of land. It will take six years to complete, said Tarek Hamdy, chief executive officer of the development. Sawiris holds 60 percent in a joint venture with local firms Kohistan Builders and Developers and Saif Group, owned by Pakistan’s prominent Saifullah family.

Pakistan’s real estate sector has seen a boom in recent years as militant violence has receded. Economic growth in the nation of more than 200 million people has risen to around 5 percent as China finances more than $50 billion on infrastructure projects across the country. House prices have more than doubled since 2011, according to property website Zameen.com, and housing projects are mushrooming in cities such as Karachi, Lahore, Islamabad and Peshawar,

“The market isn’t saturated,” Hamdy said in an interview at his office next to Islamabad’s Margalla hills, adding that Sawiris’s firm is eyeing potential other projects that may be announced by the end of this year.

Prices for a three bedroom home on the estate start at 30.5 million rupees ($275,395) and about $400 million will be invested in the development in the first two years, Hamdy said.

‘Highest Quality’
“You can develop a project at very reasonable margins” between 10 to 40 percent, he said. “The highest quality still makes money.”

Sawiris is not new to Pakistan. He previously set up one of Pakistan’s first mobile phone companies, Mobilink, now the nation’s largest cellular firm by subscriber numbers.

Apart from private businessmen such as Malik Riaz Hussain who is building Pakistan’s largest development outside Karachi, the military’s housing business has sped up efforts to grab market share. Hamdy sees overseas Pakistanis particularly in the U.S., U.K. and Middle East as major buyers and is considering launching another housing project by the end of 2018.

A shortage of housing units will boost construction activity in Pakistan as the urban population grows by nearly 30 million by 2027, BMI Research said in a December report. Construction has been one of the largest recipients of foreign direct investment and in the first seven months of this fiscal year $380 million was invested in the sector, according to central bank data.

“Here you have so much to offer,” said Hamdy.
 

American Pakistani

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What is the potential gain of Pakistan? Sorry for ignorance but I'm confused.

As far as what I understand these kind of investments are good for rich nations not for a country like Pakistan. Basically you are letting more capital flow out of the country here.
 

AZ1

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House prices are going out of reach from public in karachi and it wouldnt increase now. The baloon now is full of air.
 

Samlee

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  • Naquib Sawiris is developing a $2b estate in Islamabad
  • Pakistan faces a housing shortage as its population expands

Naguib Sawiris








Sawiris is not new to Pakistan. He previously set up one of Pakistan’s first mobile phone companies, Mobilink, now the nation’s largest cellular firm by subscriber numbers.

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Really Who Wrote This????Sawaris's Company Did Not Set Up Mobilink Mobilink Was Set Up In 1995 By Motorola With Saif Group Later On Sawaris's Orascom Telecom Purchased It:hitwall::hitwall::hitwall:
 
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What is the potential gain of Pakistan? Sorry for ignorance but I'm confused.

As far as what I understand these kind of investments are good for rich nations not for a country like Pakistan. Basically you are letting more capital flow out of the country here.
End result is developed pockets with normal standards. I hope one day entire Pakistan is covered with bahria town like places and can shove all the poor somewhere out of sight.
 

Kambojaric

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What is the potential gain of Pakistan? Sorry for ignorance but I'm confused.

As far as what I understand these kind of investments are good for rich nations not for a country like Pakistan. Basically you are letting more capital flow out of the country here.
Benefits for the common man = investment revolves around construction. Therefore labour, cement and other equipment will be required which most likely will be sourced locally resulting in increased employment and further growth in the cement industry. More jobs = more taxes which theoretically should benefit wider society as well. I emphasise the theoretically here.

Benefits for the upper middle class/elite = supply of luxury housing not meeting demand. Therefore house prices are higher than they should be. Reduced house prices will result in these said individuals spending the saved money on other luxury items (smartphones, branded clothing etc.). Basically boosting the consumer driven growth Pakistan is currently undergoing.
 

BetterPakistan

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That is very good. I hope Mortgaging institutions with low yearly interest start their operations in Pakistan too.
 

Sully3

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House prices are going out of reach from public in karachi and it wouldnt increase now. The baloon now is full of air.
i herd property prices in the posh sectors of DHA karachi are reaching $25 million
 

American Pakistani

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Benefits for the common man = investment revolves around construction. Therefore labour, cement and other equipment will be required which most likely will be sourced locally resulting in increased employment and further growth in the cement industry. More jobs = more taxes which theoretically should benefit wider society as well. I emphasise the theoretically here.

Benefits for the upper middle class/elite = supply of luxury housing not meeting demand. Therefore house prices are higher than they should be. Reduced house prices will result in these said individuals spending the saved money on other luxury items (smartphones, branded clothing etc.). Basically boosting the consumer driven growth Pakistan is currently undergoing.
But don't you think more $$$ will flow out and it will be a loss in the long run? They won't be executing a project if they are not making enough $$$, and if they are then they will eventually take those $$$ to their home. Although some poor Pakistanis will benefit but I was talking about Pakistan as a country.
 

Kambojaric

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But don't you think more $$$ will flow out and it will be a loss in the long run? They won't be executing a project if they are not making enough $$$, and if they are then they will eventually take those $$$ to their home. Although some poor Pakistanis will benefit but I was talking about Pakistan as a country.
The theory behind this kind of foreign investment that supporters give is known as the "trickle down" effect i.e. when foreign investment is made, its effects trickle down to the wider economy in stages. Examples include how Apple manufactures its phones in China. The company benefits due to low wages making its phones more competitive on the world market, the country benefits because of increased employment, which in turn leads to the wages being earned from Apple being spent on Chinese manufactured clothes, which in turn leads to more employment for Chinese people in clothes manufacturing factories, with all parties involved paying a certain level of tax which also benefits the wider economy. Theoretically its a "win win" situation for everyone if implemented correctly.
 

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