Egyptian billionaire Naguib Sawiris’s Ora Developers will next month start building a luxurious $2 billion housing estate on the outskirts of Islamabad and is eyeing further projects as it taps demand from overseas Pakistanis.
The ‘Eighteen Islamabad’ development will feature more than 1,000 homes, a golf course and a mall on 2.25 million square meters of land. It will take six years to complete, said Tarek Hamdy, chief executive officer of the development. Sawiris holds 60 percent in a joint venture with local firms Kohistan Builders and Developers and Saif Group, owned by Pakistan’s prominent Saifullah family.
Pakistan’s real estate sector has seen a boom in recent years as militant violence has receded. Economic growth in the nation of more than 200 million people has risen to around 5 percent as China finances more than $50 billion on infrastructure projects across the country. House prices have more than doubled since 2011, according to property website Zameen.com, and housing projects are mushrooming in cities such as Karachi, Lahore, Islamabad and Peshawar,
“The market isn’t saturated,” Hamdy said in an interview at his office next to Islamabad’s Margalla hills, adding that Sawiris’s firm is eyeing potential other projects that may be announced by the end of this year.
Prices for a three bedroom home on the estate start at 30.5 million rupees ($275,395) and about $400 million will be invested in the development in the first two years, Hamdy said.
“You can develop a project at very reasonable margins” between 10 to 40 percent, he said. “The highest quality still makes money.”
Sawiris is not new to Pakistan. He previously set up one of Pakistan’s first mobile phone companies, Mobilink, now the nation’s largest cellular firm by subscriber numbers.
Apart from private businessmen such as Malik Riaz Hussain who is building Pakistan’s largest development outside Karachi, the military’s housing business has sped up efforts to grab market share. Hamdy sees overseas Pakistanis particularly in the U.S., U.K. and Middle East as major buyers and is considering launching another housing project by the end of 2018.
A shortage of housing units will boost construction activity in Pakistan as the urban population grows by nearly 30 million by 2027, BMI Research said in a December report. Construction has been one of the largest recipients of foreign direct investment and in the first seven months of this fiscal year $380 million was invested in the sector, according to central bank data.
“Here you have so much to offer,” said Hamdy.