ISLAMABAD: Tarek Hamdy, the chief executive officer (CEO) at Eighteen, has said that shareholders will not repatriate profits to their home country and instead, reinvest capital in Pakistan as they venture into other cities including Peshawar, Lahore, and Karachi. Eighteen is the latest project in Pakistan’s real estate sector that features housing units set in the landscape south west of the federal capital.
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The project comes through a joint venture between Egypt-based Ora Developers and Pakistan’s Saif Group in conjunction with Kohistan Builders and Developers. In an exclusive interview, Hamdy said local partners in the project have invested equity in land acquisition, amounting to around $300 to $400 million.
“We brought a lot of investment based on equity, and we are injecting $2 billion in buildings and infrastructure works in the first phase of the project,” Hamdy told The Express Tribune. “Eighteen provides 2,000 residential units, out of which 1,000 are around the golf course. Close to 70% of them are meant for the strong, contemporary and learned middle-income group with sizes in the range of half a kanal.”
About the project’s expansion, he said Eighteen will reinvest in Pakistani cities. “If we go to Peshawar, we will invest in residential units and in Karachi, our focus shall be Sea View’s development. We are looking at affordable land around Islamabad and Lahore to build apartments.”
On investment in Gwadar, Hamdy said the port city currently houses a major industrial zone, but project developers will soon begin to look at it from a “residential” point of view. “Gwadar is in the early phase of development. We are surveying Pakistan with a broad outlook and expect consultants to provide us with studies on the market situation.” However, Hamdy said, like every country, Pakistan has its own set of challenges, that investors will have to work around in order to capitalise on the opportunities.
“The abundant talent pool offers a workforce with broad generalist skill set posing a vastly different challenge of having to identify expert skill set as the case is with a lot of other countries in a similar stage of economic development as Pakistan. You need designers, architecture firms and consultant services – a skill pool that is changing with the business dynamics but at a pace that makes it difficult for contracting them on service-based agreements, and payments.”
He added that there was no problem in importing goods into Pakistan by opening letter of credits with banks. “The major issue is to pay consultants for service facilities that is necessary for projects.”
He said the central bank should allow foreign and local investors to pay 3 to 4% of development cost for services and facilities, and facilitate investment. Hamdy said high rates of customs duties on imported products was another hurdle in the way of rapid investment in real estate services.
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Eighteen Islamabad is spread across an area of 2.7 million square yards, and features over 2,000 residential units, divided equally between villas and apartments. “We have 15 buildings in the business hub, a 7,200-yard,18-hole golf course, a five-star hotel of 150 rooms and retail and commercial areas. “Eighteen recently hosted its launch in Dubai for our international market , while plans are afoot on starting the construction of houses in June.”
Hamdy said the project has its unique characteristics. “We are building units on only 16% of the land. The density is low. Usually, developers opt for 25 to 30% area for construction. This means our project will have plenty of open spaces and green areas. “We have opted not to go for high-rise buildings despite having secured the approval to build structures as high as 165 feet. We are building only ground-plus-4, 5 and a maximum of 7 storey complexes, with an aim to reduce the carbon footprint.”
Justifying investment in Pakistan, Hamdy said the security and political elements will stabilise with time and should not be treated as deterrents to investment. “I have been here in Islamabad for the last nine months, and it has been extremely calm and peaceful. We do not limit our movements, go everywhere, and have never felt the need for any security protocol. “As foreign investors, we are ready to invest 60% in this project. “The primary investor, based out of Egypt, has been in Pakistan and is known for relaunching Mobilink (Now Jazz) about 12-13 years ago.”
Commenting on Eighteen’s facilties, Hamdy said the project’s security arrangement includes separate gates for different areas, which would add to the safety feature. He also added that the developers are in the process of establishing a special purpose vehicle company in which they will invest some of the equity. This company will be responsible for long-term operations of the project.
“We have also obtained approval from SNGPL for a proper gas network and have a ready feeder from IESCO, but are setting up our own power plant for uninterrupted supply to the residents. “We intend to finish the housing units in three and a half years making them ready for delivery by the end of 2021.”