Pakistan Real Estate Industry Update Quarter 1 2012

  • November 2013
  • -
  • Business Monitor International
  • -
  • 54 pages

Despite having a vast and rapidly grow ing population and noticeably improving infrastructure, demand for commercial real estate in Pakistan continues to decline, largely as a result of the country’s widespread political instability and history of corruption. However, a drop in interest rates in August 2011 may help in the long term. High interest rates and slowing economic growth have weighed heavily on the market, and this change may precede the beginning of a rise in demand in the future.
Despite these setbacks inherent in the country, a number of prestigious new developments (such as the World Trade Center under construction in Islamabad) are hoped to contribute to a resurgence in real estate investment.
Key Opportunities In The Real Estate Industry :
- Plenty of residential, mixed-use development projects are under way, including the eco-friendly Park Enclave complex in Islamabad, construction of which will be overseen by the Capital Development Authority (CDA). The trend for environmentally conscious development seems to stem not from consumer demand but from the fact that it opens access to land in zones that would not normally be available for development.
- Lahore Development Authority and Islamabad’s CDA are targeting and shutting down developments that are built or run illegally, in the hope of attracting legitimate projects in their place and improving transparency in both cities.
- The UAE and China are examining investments in Pakistan, which could increase its international profile in the long term.
Key Risks To The Real Estate Industry :
- Rents and yields remain difficult to projection, given the precarious security situation in the country.
- Turf war-related violence in Karachi is ongoing and could cause continued delays to new developments in the area, as highlighted by the Human Rights Commission of Pakistan’s factfinding mission to the city in July 2011.

Table Of Contents

Executive Summary ... 5
Industry SWOT Analysis .... 6
Pakistan Real Estate/Construction SWOT .. 6
Pakistan Economic Environment and Risk Analysis ..... 7
Pakistan Business Environment SWOT 8
Real Estate

Market Overview ... 9
Real Estate Industry Analysis .. 12
Data : Pakistan’s Real Estate Industry - Historic Rents, 2010 And 2011 (per m2/month, PKR) ..... 13
Data : Pakistan’s Real Estate Industry - Net Yield, 2011 And 2012 (%)...... 14
Data : Pakistan’s Real Estate Industry - Terms Of Contract/Lease, Mid-2011... 14
Data : Pakistan’s Real Estate Industry - Available And Vacant Space, Mid-2011 ..... 15

Market Projection Scenario .... 16
Real Estate Outlook ...... 16
Data : Pakistan’s Real Estate Industry - Rentals, from 2011 to 2012 (a m2/month, PKR) ..... 17
Data : Pakistan’s Real Estate Industry - Projection Yield, from 2008 to 2015 .... 18
Construction And Infrastructure Outlook . 19
Data : Pakistan Construction And Infrastructure Market Data .. 19
Construction And Infrastructure Projection Scenario ...... 20

Macroeconomic Data ...... 21
Pakistan - Economic Activity ...... 23

Environment Overview ... 24
Real Estate/Construction Business Environment Ratings ..... 24
Data : Real Estate Business Environment Ratings .. 24
Pakistan’s Business Environment ...... 25
Data : BMI Business And Operation Risk Ratings .. 25
Institutions ...... 26
Data : BMI Legal Framework Rating 27
Infrastructure .. 29
Data : Labour Force Quality ...... 31
Data : Asia, Annual Fdi Inflows . 32
Market Orientation 32
Data : Trade And Investment Ratings 34
Data : Top Export Destinations .. 36
Operational Risk .... 37

Competition Overview .. 39
Company Profiles ..... 41
Bestway Cement ..... 41
Ev-K2-CNR ..... 42
Rufi Group ...... 43
BMI Methodology ..... 44
How We Generate Our Market Projections ...... 44
Construction Market ... 45
Bank Lending .. 46
Real Estate/Construction Business Environment Rating 46
Data : Weighting Of Indicators .. 47
Sources .... 49

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