CHINA EYES PAKISTAN HOUSING SECTOR
Nov 16 - 22, 2009
China has shown interest in launching low-cost housing projects all over Pakistan under the Prime Minister's Housing Scheme aimed at building affordable houses for every citizen of Pakistan where the economic downturn has left very few people with the capacity to invest for their housing needs. The Chinese firms eying the country's housing sector include China State Engineering Corporation, Beijing Construction Company, Shanghai Construction Company and International Contractors Association of China.
Analysts believe that China's participation in low-cost housing projects would not only rapidly increase its stakes in real estate across the country, but it would also revive and activate a number of industries like engineering, construction companies dependent on the housing sector.
A three-member delegation from Pakistan Housing Authority recently visited Beijing and held meetings with leading Chinese construction companies for launching new housing projects in the country. The visiting delegation expressed the country's desire to benefit from the efficient, environment friendly, energy saving, low cost, natural disaster resistant and rapid construction techniques of the Chinese in the housing sector.
The high mark rates of the private banks have put housing finance out of common man reach in the south Asian country. The current industry scenario in the country also worries the local builders and stakeholders.
For the people belonging to the lower-income group, it is impossible to even think of a long term saving plan for housing. The private banks have almost doubled their markup rates putting housing finance out of common man reach in the country. In the given real estate scenario, the launching of low cost housing schemes by Chinese firms would be a welcome step, according to the local analysts.
The real-estate business has also developed rapidly in recent years in China, which has more than 20,000 property-development companies. The Chinese government has worked out policies and measures for the reform of the urban housing system to promote comprehensive development of the real-estate business.
The Chinese investment has also witnessed an increase in the different industrial estates of Punjab province over the last five years. Azad Kashmir particularly witnessed a surge in China's activities in real estate after an earthquake destroyed many of its cities including Muzaffarabad, Bagh, and Rawalakot in October 2005. China has already committed to spend $300 millions for the reconstruction of earthquake affected areas under the urban development programme in Kashmir.
China has been in the forefront in the reconstruction activities in the quake affected areas of Kashmir. Under the urban development programme in Kashmir, Beijing has pledged to spend over $190 million on 90 projects in Muzaffarabad, $123.55 million on 50 projects in Bagh and over $38 million for the execution of 30 projects in Rawalkot.
China International Industry and Commerce Co Ltd (CIIC) is already engaged in the construction of housing units in Islamabad, the country's capital.
Islamabad also plans to establish separate industrial zones for Chinese investors in Lahore, Faisalabad and other industrial estates of Punjab province with maximum facilities. Last November, during his visit to China, Punjab Chief Minister Shahbaz Sharif had announced that his government had prepared a comprehensive package of incentives for Chinese companies intending to make investments in Punjab. At the inauguration of the council of investors and traders of Jiangsu province last November, he had declared that Chinese entrepreneurs would get maximum facilities and protection in the province.
The analysts believe that establishment of the first-ever Chinese overseas special economic zone (SEZ) at Kala Shah Kako, near Lahore in Punjab would go a long way in facilitating Chinese investment in the province.
Separate industrial zone has also been proposed for Chinese investors in Lahore Sundar Industrial Estate, which has been established on an area of 1,600 acres of land on which an investment of over Rs 9 billion in connection with factories and the provision of infrastructure had been made by the end of 2006. Sundar Industrial Estate has been provided with the state-of-the-art infrastructure.
Under Former government of President Pervez Musharraf, 500 acres of land had been allocated for Chinese investors for the establishment of industrial zones in Faisalabad industrial city (FIC) where China National Power Company has set up a power plant. The Chinese have already planned to invest $200 million in the proposed Industrial Estate in Faisalabad. The industrial estate will spread over 4,500 acres. It is strategically located on Motorway M-3 South near Faisalabad City, Faisalabad International Airport, Value Addition City and Faisalabad dry port. The superb site location and excellent services have drawn investors from all over the world, making M-3 Industrial City the highest profile industrial estate in South East Asia. It is the first scientifically designed and appealing industrial estate in Pakistan which will provide the highest level of international infrastructure.
Chinese construction companies have also been eyeing Pakistan's prize port at Gwadar in Balochistan province. A tax-free industrial zone on 4,050 hectares of land in the port city has already been planned. China, which has so far been the biggest investor in Gwadar, is expected to launch housing schemes and high-rise construction on commercial plots, as soon as the strategically located port becomes fully operational.
Islamabad has plans to establish hotels, motels, playgrounds, boating clubs, theme parks, marinas and other recreation projects in Gwadar. The future port city will be connected to the rest of the country by land, sea and air links. The government has decided to set up a tax-free industrial zone of international standard in Gwadar and it has acquired about 4,050 hectares of land for this purpose.
Under former government, Gwadar witnessed speculative trade in real estate. This speculator-fuelled scenario in the port city however crashed after the new democratic government took office in Islamabad following February 2008 election.
Chinese companies are yet to fully tap the vast potential in the country's real estate. The real estate projects under Prime Minister's Housing scheme would help China in increasing its interests in the country's real estate that witnessed a boom in the past three years. Presently, while the foreign investors are loosing attraction in the terrorism-hit Pakistan, the China has committed not only to complete its all ongoing projects but also to launch new projects in the strife-torn country.