Pakistan Real Estate Report Q3 2011
Includes 3 FREE quarterly updates
Pakistan’s commercial real estate sector is going through its third consecutive tough year as demand for space continues to fall. Weak economic growth coupled with high inflation and measures to stem the increasing inflation weigh heavily on the industry.
A major influence in the marketplace currently is the intervention of the government in low-cost residential property. The government is determined to provide housing access to the entire population – a tall order when 40% are below the poverty line. The Capital Development Authority (CDA) has launched numerous projects to build residential and multi-use properties. The Pakistan Housing Authority, a subsidiary of Ministry of Housing and Works, constructs affordable apartments and says it is the first time that the government has itself got involved the actual construction of affordable housing. Both agencies have attracted some negative press for focusing on projects targeted at government employees and politicians, rather than those in poverty.
It is outside the government sector and its residential projects influence that demand has really dried up. Many small businesses, unable to afford the rent and the other costs that come with commercial premises, have been forced to use residential premises, despite the risk of penalties and fines. These once-tenants have essentially removed themselves from the commercial real estate market and we have seen big falls in rents at the minimum end because of this.
Some of the key opportunities currently in the real estate market are:
Despite the downturn, new construction projects are underway and there is scope for developments which offer the population more safety and security in volatile country.
The development of multi-use projects has just started and looks likely to be the way of both helping the government meets its target of housing-for-all and developing better-quality commercial space. The country has its first mega-development project, The Centaurus in Islamabad, which as of May 2011 had the basement, retail shopping mall space and 20 floors of residential apartments completed.
Some key risks to the current real estate market are:
Rents have and are falling but yields have not moved much at all, indicating that property prices have fallen by nearly as much as rents.
The country’s economic imbalance between growth and inflation pose an ongoing threat to the sector.
While Pakistan’s real estate fortunes are somewhat linked to the success or failure of companies in Dubai, the country is at the mercy of the Middle East.
The highest risk to the country at the moment comes from large-scale military or terrorist action and/or a similar extent of devastation caused by nature.
Pakistan’s commercial real estate sector is going through its third consecutive tough year as demand for space continues to fall. Weak economic growth coupled with high inflation and measures to stem the increasing inflation weigh heavily on the industry.
A major influence in the marketplace currently is the intervention of the government in low-cost residential property. The government is determined to provide housing access to the entire population – a tall order when 40% are below the poverty line. The Capital Development Authority (CDA) has launched numerous projects to build residential and multi-use properties. The Pakistan Housing Authority, a subsidiary of Ministry of Housing and Works, constructs affordable apartments and says it is the first time that the government has itself got involved the actual construction of affordable housing. Both agencies have attracted some negative press for focusing on projects targeted at government employees and politicians, rather than those in poverty.
It is outside the government sector and its residential projects influence that demand has really dried up. Many small businesses, unable to afford the rent and the other costs that come with commercial premises, have been forced to use residential premises, despite the risk of penalties and fines. These once-tenants have essentially removed themselves from the commercial real estate market and we have seen big falls in rents at the minimum end because of this.
Some of the key opportunities currently in the real estate market are:
Despite the downturn, new construction projects are underway and there is scope for developments which offer the population more safety and security in volatile country.
The development of multi-use projects has just started and looks likely to be the way of both helping the government meets its target of housing-for-all and developing better-quality commercial space. The country has its first mega-development project, The Centaurus in Islamabad, which as of May 2011 had the basement, retail shopping mall space and 20 floors of residential apartments completed.
Some key risks to the current real estate market are:
Rents have and are falling but yields have not moved much at all, indicating that property prices have fallen by nearly as much as rents.
The country’s economic imbalance between growth and inflation pose an ongoing threat to the sector.
While Pakistan’s real estate fortunes are somewhat linked to the success or failure of companies in Dubai, the country is at the mercy of the Middle East.
The highest risk to the country at the moment comes from large-scale military or terrorist action and/or a similar extent of devastation caused by nature.
Contents
Executive SummarySWOT Analysis
Pakistan Real Estate/Construction SWOT
Pakistan Economic SWOT
Pakistan Business Environment SWOT
Real Estate Market Overview
Table: Pakistan’s Real Estate Market – Rents, 2009 And 2010 (m²/month, US$)
Table: Pakistan’s Real Estate Market – Net Yield, 2010 And 2011 (%)
Table: Pakistan’s Real Estate Market – Terms Of Contract/Lease
Table: Pakistan’s Real Estate Market – Available And Vacant Space, Mid-2010
Real Estate Market Analysis
Industry Forecast Scenario
Real Estate Outlook
Table: Pakistan’s Real Estate Markets – Rents, 2010-2012 (m²/month, US$)
Table: Pakistan’s Real Estate Market – Forecast Net Yield, 2008-2015 (%)
Construction And Infrastructure Outlook
Table: Pakistan Construction And Infrastructure Industry Data, 2007-2015
Table: Pakistan Construction And Infrastructure Industry Data, 2012-2020
Macroeconomic Outlook
Table: Pakistan - Economic Activity, 2008-2015
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Asia Real Estate/Construction Business Environment Ratings
Pakistan’s RECBER
Project Finance Ratings: Outlook For Asia Pacific
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating
Pakistan’s Business Environment
Table: BMI Business And Operation Risk Ratings
Table: BMI Legal Framework Rating
Table: Labour Force Quality
TABLE: ASIA, ANNUAL FDI INFLOWS
Table: Trade And Investment Ratings
Table: Top Export Destinations, 2002-2009
Competitive Landscape
Company Profiles
Bestway Cement
Ev-K2-CNR
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase – Commercial Construction
Table: Commissioning And Operating Phase – Energy And Utilities
Table: Commissioning And Operating Phase – Transport
Sources 58 Skip to top