Encouraging policies, infrastructure and one-window operation facility can pull the investors
Interview with Mr Mohsin Bakar Sheikhani — Chairman, ABAD
Mohsin Abu Bakar Sheikhani, is the Chairman of Association of Builders and Developers (ABAD) 2017. He is the son of a well known builder and a distinguished member of property developers fraternity and known for quality projects in Karachi. Mr. Mohsin Sheikhani has also served the ABAD and whole builder community as the Chairman of the organization for the term 2013-14 and 2011-12. He is the Director of Hina Housing Projects Private Limited and has several prestigious housing projects to his credit. Working with different sub-committees of the ABAD, he has been the Convener of Law and Order as well as Revenue Land Matters and De-freezing of Land by BOR Sub-Committees of ABAD. He has been elected as member of CEC and REC of the ABAD many times. He is well versed with the affairs of the construction business. Mr. Mohsin Sheikhani is a strong advocate of Affordable Housing for the people from lower strata of the society and he is raising this issue at every governmental forum as his social and corporate responsibility.
Pakistan has emerged on the world economic map as a choice destination of investment for various reasons like global volatile economic situation, strong outlook of economic growth and above all Chinese investment in infrastructure across the country, energy sector and the financial sector including Pakistan Stock Exchange. All these developments are unlocking the economic potential of the country, said Mohsin Sheikhani, Chairman Association of Builders & Development in an interview.
PAGE: WHAT IS THE SCOPE OF INVESTMENT IN THE REAL ESTATE SECTOR?
MOHSIN: At the moment there is a shortfall of 12 million housing units in Pakistan, which offers a huge opportunity for the investors. According to an estimate there is a scope for investment of over $180 billion, which is a huge industry for investment for local and foreign investors.
According to World Bank these investment is estimated at the lowest rate such as a low cost housing of Rs15 lakh for the low income group. If we include high value projects the potential of investment in real estate industry it can be multiplied to $180 billion.
We have to run from pillar to post for utilities of a project, under a one-window operation for utilities and a firm policy, we are not asking for any incentive, the huge size of the industry would certainly attract foreign investment in this sector. Why investors rush for investment in UAE because they have been given a policy and one-window facility for utilities and documentation why we cannot do it in Pakistan.
PAGE: THE EXISTING HOUSING INDUSTRY WORTH $180 BILLION MEANS THERE SHOULD BE AN ATTRACTION FOR FOREIGN INVESTORS IN THIS SECTOR?
MOHSIN: It will be interesting to note that foreign investors and international builders are keen to invest in Pakistan but it is unfortunate that we have not evolved any policy to attract foreign investors in the real estate sector, we in Pakistan only focusing on tax collecting rather than looking in the bigger prospects of mass production and mass tax collection at lower rate. If this industry is given true relief the taxation collection size could increase many times from the industries allied to property development.
PAGE: IT SEEMS THAT PROPERTY OR REAL ESTATE SECTOR IS BOOMING IN PAKISTAN, WOULD YOU LIKE TO COMMENT ON THE SITUATION AND ELABORATE REASONS BEHIND THIS BOOM?
MOHSIN: Actually the rise and fall in the real sector is associated with the state of the economy and fortunately the economic indicators are noticeably positive, law and order situation also seems much improved while international environment as well as CPEC projects, which is being felt all around. All these factors are favorable for property development in Pakistan. However one of the most important factors is the global situation for overseas Pakistanis. Actually every overseas Pakistani who feels unsecure due to emerging volatile situation having a natural desire to have roots in Pakistan. Hence the international conditions are also contributing in the growth of property development in the country.
PAGE: THERE IS UNDUE PRESSURE OF DEVELOPMENT IN URBAN AREAS OF THE COUNTRY WHILE THE SEMI URBAN AREAS ARE NEGLECTED IN TERMS OF DEVELOPMENT, HAD WE FOCUS ON RURAL AND SEMI RURAL AREAS OF THE COUNTRY WE COULD BE HAVE EXPLOIT PLENTY OF ECONOMIC POTENTIAL OF THE COUNTRY BESIDES AN EFFECTIVE CHECK OF POPULATION INFLUX FROM RURAL TO URBAN AREAS?
MOHSIN: It is unfortunate that the rural areas, which are the backbone of the economy due to agriculture are presenting a neglected look. The lack of infrastructure and poor living conditions not only create a sense of deprivation among rural population but offer no attraction for investment especially in property projects. In fact the economic policies and development should have a starting point from rural areas as it has been successfully done in China.
However the situation is being changed and some decent projects are also coming up in the countryside as well. It is unfortunate that the rural population was neglected in terms of health and education roads and electricity and other facilities available for urban population.
This an important aspect of socio-economic growth and it seems that the government is also looking for development in the neglected areas with the development of highways and motorways being developed alongside the rural areas.
PAGE: THERE IS A FEELING THAT DUE TO TAXATION AND VALUATION OF PROPERTY BY THE GOVERNMENT A LARGE NUMBER OF INVESTMENT HAS BEEN SHIFTED FROM REAL ESTATE TOWARDS STOCK MARKET, DO YOU AGREE WITH THIS NOTION?
MOHSIN: Actually investment in the stock market is a specialized field and not everybody’s baby, so there is no possibility of a major shift from real estate to stock market. Investment in real estate calls for effective documentation to give a secure feeling to the investors. In this, regarding the more effective steps again land grabbers and corrupt elements the more will be investment in the real estate.
However, the valuation policy introduced earlier had a drastic impact on property business and the transactions in property had come almost to a halt for almost 11 months, however the government came out with a new valuation policy which has divided the valuation into three segments, such as FBR value, original value and DC value with a claim that it is being done for ensuring documented economy. In fact the dividing of valuation policy into three categories speaks of a vague concept, which does not serve the purpose. In fact the policy of valuation is just to increase government funds at the cost of growth in the property sector, which is allied to over 70 industries and creates jobs to millions across the country.
Property valuation is a provincial subject under 19th amendment and let the provincial governments to deal with it, any thing comes from the federal level may harm the development process, which requires a revisiting by the policy makers. There is a need to make the real estate a corporate sector through rationalized policies in the larger interest of the country.