Housing and Construction sector after remaining
stagnant for almost two decades seems to poise for a second boom in
Certainly, it's a good sign for the economy, as
activity in housing and construction sector ignites a larges number of
down stream industries allied to the construction and housing business.
Besides growing interest of the domestic investors
who are coming in with large investment in this sector, there are strong
indications of growing interest of the foreign investors for the first
time in Pakistan.
Kanooz, a leading industrial group of Saudi Arabia,
in collaboration with private sector in Pakistan has entered into an
agreement to invest $100 million in the housing and construction, which
has already taken a kick-start almost after a gap of over three decades.
This Saudi group, it may be noted, is also a
prospective Buyer of Karachi Electric Supply Corporation, in
collaboration with Siemens Germany, which has been short-listed by
Privatization Commission for KESC'S bidding.
Another investor's delegation from Canada recently
visited Association of Builders and Developers (ABAD) on February 28 and
discussed matters of interest to explore investment opportunities and
joint ventures in the housing and construction sector.
Yet another delegation from Malaysia is also due in
March to explore possibilities of joint ventures and investment in the
housing sector already flooded by the local investors in a big way.
According to details, the Orient Group of Pakistan
has recently signed Memorandum of Understanding (MoU) with KANOOZ Group
of Saudi Arabia for $100 million Housing and Construction projects in
Hafeez ur-Rehman Butt, Chairman of the Orient Group,
says that the agreement with Saudi group is the first ever investment
agreement in the sector with any foreign investor in Pakistan.
Although the agreement features mainly in the Housing
and Construction sector, yet the Saudi partners have also expressed
interest in other areas like Petroleum, Mass Transition, and Tourism and
Spelling out the investment plan, Butt said that
infact the plan evolved for investment spread over various projects
including a low cost housing projects for the homeless. A certain
portion of the low cost houses would be given free of cost through
balloting to the needy homeless people. That would be a gift from Saudi
people for the shelter in Pakistan. Besides low cost housing, plans
include development of high rises commercial and residential complexes
in Karachi, Lahore and Islamabad.
Hafeez Butt, who is also the former Chairman of ABAD
said that government is also taking keen interest to support investment
in housing sector, which offer tremendous opportunities for the
investors at home and from abroad. He said that there is a shortfall of
over 6 million housing units in Pakistan, while the annual demand for
new housing was estimated at about 6-7 lakh. It is irony that both
public-private sectors could never meet more than half of the annual
demand. That leaves a carry over demand for some 3 lakh new units every
In the backdrop of the above situation, there were
tremendous opportunities for investment in the housing sector. As a
result of the positive policies of the government, and financing
facilities offered by almost all commercial banks, the housing sector is
going to touch new heights in Pakistan, he said.
Regarding agreement with Saudi Group Kanooz, he said
that H.H. Walid Bin Hassan Bin Mohammed al Saygh, President and Vice
Chairman of Kanooz Group and Hafeez ur-Rehman Butt, Chairman of Orient
Group signed the MoU and a final shape to the agreement will be given
Kanooz Group is a prominent business of Saudi Arabia,
which headed by Prince Abdul Aziz Bin Metab Bin Abdul Aziz Al Saud, who
is the Chairman of the Board. This deals in Construction, Tourism,
Petroleum, Mass Transit, Energy and Hotel and tourism sectors in and
outside Kingdom of Saudi Arabia.
On the home front, some leading public and private
enterprises have launched huge commercial and residential projects in
Karachi, Lahore and Islamabad involving massive investment in the
housing sector. Among the forthcoming projects, Defense Housing
Authority's "Creek City" is a prestigious project at the
fascinating beach of the Arabian Sea at Karachi Shore. DHA has already
achieved financial close of the project which is expected to generate
about 120,000 new jobs. This project would give a tremendous boost to
economic activity in the country by opening avenues for investment and
Creek City is said to involve a direct investment
worth $1.5 billion that would impact on the GDP of Pakistan to the tune
of $4.4 billion earning for the government. This project when completed
is expected to add $76.1 million in taxes every year. It is estimated
that revenue that these activities will generate are estimated to the
tune of $500 million annually.