More than Meets the Eye


If a property investor was offered a stake in a rapidly industrialising country with 200 million citizens (ranking sixth globally) whose median age was 24, who has almost as much purchasing power as India, where English is an official language in a democratically elected government, which boasts an expanding economy grounded in services, natural resources, manufacturing and textiles as well as one of the world’s fastest growing middle classes, is a signatory of both the Kyoto Protocol and Paris Agreement, and has two supercities with a combined 37 million people, they’d likely jump at the chance to break into such a fundamentally sound and potentially lucrative market.

That market isn’t fiction: it is Pakistan. Despite lacking a PR machine like India’s and a reactionary media that seems to be actively trying to convince the world the country is a black hole of peril, Pakistan has a lot to recommend to investors—arguably more than its regional competitors.

Contrary to popular belief, Pakistan is historically diverse and counts many influences—Muslim, Hindu, Persian, Greek, Mongolian British—within its vibrant personality. “Despite being so geographicallyclose to India and Sri Lanka, Pakistan has its own distinct culture and set of circumstances,” explains Zeeshaan Shah,board member of the London-based developer CPIC. “It has more open green land, its relationship with China has a deeper and more mutually beneficial history than the one between America and India, and its experience with Afghanistan has meant that it is more focused on security.”

After partitioning and independence in 1947, the country faced the same internal challenges as many emerging states, and often found itself caught between opposing external forces. Nonetheless, Pakistan has finally settled into a democracy actively tackling its most pressing problems (for example poverty and literacy), bringing a volatile economy under control by 2013, and encouraging greater FDI—not too difficult given its strategic position bordering two economic behemoths and a 2.5-billion-person consumer market on its doorstep. FDI was up 4.4% through the third quarter of 2017.


In its 2018 Pakistan Real Estate Market Review, Colliers International stated, “Pakistan’s economy showed significant signs of recovery and expansion in 2017 in comparison with previous years. The factors contributing to this improvement include improved security conditions, strong credit growth, soaring investment activity, recovery of the agriculture and manufacturing sectors and an overall improvement in macroeconomic conditions.” Things weren’t ideal, as rising prices of commodities and dwindling foreign exchange reserves were concerns, but overall GDP was forecast to grow 5.5% for 2018. Pakistan is looking strong, and one of the reasons for that is its heavy involvement in the China-Pakistan Economic Corridor (CPEC) starting in 2013. CPEC is a critical branch of China’s One Belt, One Road (OBOR) Initiative (similar to a Marshall Plan for Pakistan) valued at $62 billion in transport and energy infrastructure investment. OBOR makes Pakistan a particular point of interest, as it practically sits in the heart of the 60-country, four-continent spanning project. 

“Businesses have seen this huge investment in key cities and towns along CPEC and they know that better infrastructure and improved access to trade routes will make business in Pakistan a lot easier,” says Shah, whose company CPIC specialises in developing along the route.One of CPIC’s most ambitious developments is the mixed-use International Port City Gwadar, featuring 225,000 square feet of green space, office space, global retail, five-star hotels and residences with international level amenities. Gwadar sits at the end of the road that connects Pakistan to Xinjiang, on the Arabian Sea—a gateway to the Middle East and beyond. 

Currently, the majority of investments into Pakistan has been institutional (only residents are allowed to rent or buy homes in a complicated process). Lower labour costs mean higher yields for investors, which has attracted 600 MNC retailers, as well as oil and gas operators from the UK (investing US$100 million). Health care and tourism are burgeoning industries, and services represent 56% of the GDP. It would appear the OBOR is already working. “China is clearly the biggest investor through [OBOR], but surprisingly, the UK recently usurped the US for second place,” states Shah, noting investors from Australia, Bahrain, Egypt, Kuwait, the UAE, Qatar, South Africa, Canada, Denmark, Luxembourg and Norway have moved in too.

While the OBOR may be a boon to Pakistan, it is not without critics, who raise potential threats to sovereignty concerning land and resources for those subject to Beijing’s benevolence, as well as damaging trade imbalances. Shah isn’t worried. Pointing out the massive Royal Albert Dock project in London, specifically designed to cultivate trade between the UK and the PRC, he notes the road goes both ways. “China and Pakistan have had a stable and supportive relationship for decades through a relationship that is often termed as ‘Iron Brotherhood’ and ‘All Weather Friendship’. They share a border and their long-term regional foreign policy ambitions are aligned.” Additionally, Pakistan is no shrinking violet unable to defend itself; it has the sixth largest standing army in the world. 

Hurdles still exist, but Colliers is optimistic, noting the April 2018 tax reforms designed to nab evaders and suss out the country’s undocumented economy. Among the measures expected to have an impact on real estate, are a tax on immovable property and a governmental right to acquire them, an upper maximum for local and provincial property registration, and a prohibition on purchases over PKR 4 million (HK$270,000) for non-filers. The regulations are less about collecting taxes as they are about documentation in a largely undocumented sector and creating the kind of legal framework that investors like. 

Shah agrees the indicators will keep trending up as long as Pakistan can, among others, continue streamlining bureaucracy to reduce costs and keep up the effective work that has been going on to reduce security risks. “We need business dealings in Pakistan to become more transparent across all markets. We at CPIC are particularly proud to be introducing transparency and international standards of service into Pakistan’s real estate market.”  

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