Rafi Group is one of the most distinguished names in
real estate development. A pioneer and trendsetter, it has given Lahore
some splendid buildings, which have lent grace and beauty to the city.
Imtiaz Rafi Butt, the Chairman of Rafi Group, is a man with rich
professional experience, innovative outlook and a passion for
excellence. He is the Honorary Consul for Malaysia in Lahore and
Chairman of the Jinnah-Rafi Foundation. In an interview with the writer,
Imtiaz Rafi Butt spoke about the Rafi Group, the post 9/11 trends in
real estate business and the Defence Shopping Mall, his pet project
Q. When did
you set up the Rafi Group? Could you shed some light on the changing
fortunes of the real estate business?
established the Rafi Group in 1978. Since then real estate business has
seen many ups and downs. It was, in fact, at its peak in the eighties.
This was chiefly because of the United States' war against the Soviet
Union, which was being fought in Afghanistan by the Jihadis and Pakistan
fully supporting it. American money was being liberally poured into
Pakistan and the remittances sent home by expatriate Pakistanis. Houses,
shops and offices were quickly snapped up. It was a time when, compared
to other enterprises, real estate was paying the highest dividends. But
then in the late eighties there came the huge cooperative scandal. This
gave a great blow to real estate business. Billions of rupees got
blocked. It shook the confidence of the people who turned away from this
sector. Secondly, banks started offering higher rates of interest on
deposits. Moreover, the constant steep rise in the value of the dollar
also induced people to convert their rupees into dollar and place them
in banks. Consequently, real estate business came to a standstill. The
exodus of Pakistanis to other countries and the erratic policies of the
Nawaz government and the resulting uncertainty also took their toll.
When, thereafter, General Pervez Musharraf assumed power, the first step
that he took was to set up the NAB to eliminate corruption. At the same
time, he announced the imposition of sales tax. As a consequence,
investors withdrew their money and real estate suffered a further set
Q. How did the
events of 9/11 affect real estate business?
A. Real estate
business received a sudden boost. There were several reasons for it.
Firstly, disillusioned with the ill treatment meted out to them in the
US, Pakistanis started investing in Pakistan. A major part of these
investments were made in Lahore. The second factor was the decline in
the value of the dollar and in the rates of interest on deposits in the
bank. People withdrew their money from the banks and reinvested it in
property. Thirdly, with the end of the 'hundi' system, remittances were
now being sent through banks. Moreover, Pakistan also began to receive
massive aid from Europe and the US people thought less about going
abroad and considered real estate the best avenue for investment. These
factors boosted property business. Now everyone rushed to invest in
property. Prices soared. To my mind, the sharp rise was unrealistic.
Thrilled by the 'prospects', some of my friends became too optimistic.
They advised me to invest in proposed Phases of Defence and the new
airport area. But the prices they quoted were so obnoxious and made no
business sense to me. I told them frankly that I for one would never buy
land at such an unviable price. However, what I had forecasted is
happening. After a short while the purchasers are getting disappointed.
Now my wide-eyed friends are sitting on their costly investments in the
above mentioned areas and waiting. I pray that they overcome their
predicament. It may take a long time before a buyer turns up to offer
them their fancy price.
Q. Was the
unrealistic rise in prices limited to plots or did it affect the plazas
A. No, it did
not affect the plazas much. Our own plazas are a case in point. There is
the Central Plaza, which is now complete, and two others — Empress
Towers and Defence Shopping Mall — are nearing completion. There is
not much increase of prices in these units. The little price rise is
logical and justified but the way things are now, I see a big price rise
coming to commercial plazas as land prices and cost of construction have
increased tremendously and buyers are more and more turning towards
getting shops/offices in completed plazas for investment and personal
Group's Defence Shopping Mall is a magnificent project. Where exactly is
Shopping Mall is located in the heart of Defence Boulevard of Defence
Housing Authority. It is the flagship of Rafi Group's range of projects.
It is the largest single-purpose shopping complex in this part of the
city. No such facility exists there at present. It is located at the
entrance of Defence Housing Authority — the largest, the latest and
the most organised housing complex in Lahore. It would cater for the
folk in Defence, Cavalry Ground, Cantonment and Gulberg. The Defence
Shopping Mall subscribes to the highest international standards and is a
masterpiece of modernity and architectural ingenuity.
Q. What are
the special features of your new shopping mall?
A. The Defence
Shopping Mall, as I have said earlier, has been conceived as a 'one use
only' shopping mall with a large number of shops under one roof — a
bazaar of the 21st Century. A spacious, six-storey atrium integrates all
the floors including that for parking. Secondly, a big capsule lift and
escalators have been provided to bridge the height. Thirdly, void spaces
and skylights provide natural light and ventilation to the upper floors
and thus make shopping convenient and enjoyable. An entire floor has
been set aside for parking. There is, in addition, ample outdoor parking
space in the three-side open fronts. Its prime location lends a pleasing
look to its surroundings. It is almost like a drive-in shopping centre.
I am certain that the Defence Shopping Mall will have an edge over all
the other shopping centres in the city. The business community should
bear in mind that Defence Society is fast expanding as a trading centre.
Investing in plots at present high prices would not be a very wise thing
to do. Defence Shopping Mall is ready for business. It has 580 shops.
400 of these have already been sold. I would advise investors and buyers
to benefit from this offer and buy shops at their earliest. The shops'
prices are bound to increase also rapidly and there is good demand for
Q. In terms of
price appreciation, which type of property for investment is more
viable, commercial or residential?
property mostly increases in value more than the residential because
residential price rise is in general limited to time and
devaluation/inflation of money but commercial property rise is of course
due to these factor also plus more importantly as the commercial
activity increases in that vicinity, the property surrounding it also
increases. For example, if a big or busy store/shop opens up next to
your commercial plot or in a commercial plaza that will immediately
affect in price rise on your commercial plot or shop in that vicinity.