Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ
Pakistanis have invested $10.6 billion in Dubai real estate, ranking them as the third largest investors in the city on the Gulf. Indian investors lead Dubai real estate investments with $29.8 billion, followed by British investors' $14.7 billion investment.
With at least $146 billion in foreign wealth invested, the Dubai property market is now the world's largest offshore investment market for foreign investors. It is now twice as large as the London real estate market in terms of wealth invested by foreigners through shell companies. There are nearly 20,000 unique foreign owners of Dubai real estate from Pakistan, the third largest number behind almost 35,000 Indian owners and about 23,000 owners from the United Kingdom, according to the EU Tax Observatory.
The record flow of foreign wealth into Dubai real estate has drawn the attention of the FATF (the Financial Action Task Force), the global anti-money-laundering watchdog. The UAE is now "under increased monitoring” (often referred to as the grey list) by the FATF. It is widely accepted that real estate is used for money laundering and hiding wealth from tax authorities.
Many rich Pakistanis, including top politicians and their family members, own real estate in Dubai, according to press reports. Most of the top politicians from Pakistani political parties like PPP, PML-N, ANP and MQM own Dubai real estate. A 2020 Transparency International report said the following about Dubai's attraction to foreign unexplained wealth:
"The UAE’s booming construction and real estate sector emerges as another major weakness. It accounts for a fifth of the Emirates’ GDP, but remains incredibly vulnerable to money laundering. Complex ownership structures can be used to obscure the identity of those buying property, as well as where their money is coming from".
"Despite the UAE’s role as a major international hub for finance and trade, the report concludes that authorities there are not cooperating with international partners. This could make the Emirates an attractive location in which “criminals could operate, maintain their illegal proceeds, or use it as a safe haven.”
"The FATF report confirms what investigative journalists, anti-corruption activists and whistleblowers have been saying for years: the UAE is a key piece in the global money-laundering puzzle. Its susceptibility to money laundering has seen it appear time and again in major cross-border corruption scandals".
Karachi's Bahria Town being built on the outskirts of Pakistan's financial capital is among the world's largest privately developed and managed cities. It is spread over an area of a little over 70 square miles, larger than the 49 square miles area of San Francisco. When completed, Bahria Town will house over a million people, more than the entire population of San Francisco.
Bahria Town Karachi
The city comes complete with private roads, community parks, mosques, schools, colleges, universities, hospitals, libraries, business parks, restaurants, recreation facilities, sports grounds, shopping malls etc. It has been the subject of litigation by local villagers who claim that their land was unlawfully taken away from them to build this new city. Pakistan Supreme Court recently reviewed their cases and forced a settlement worth Rs. 406 billion to be paid by Bahria Town developer named Malik Riaz Hussain.
Karachi: Bahria Town Square
Bahria Town and other similar private cities and gated communities are popular with Pakistan's rising middle class. They are looking to escape the chaos of the nation's burgeoning cities unable to cope with the massive and uncontrolled waves of urbanization. The issues facing Pakistani cities range from lack of basic services to rising urban crime.
Karachi: Bahria Town Housing
The private city promises to “turn the vision of modern Pakistan into a reality”, with private and secure supplies of water, gas and electricity, garbage collection as well as private security and well maintained wide tree-lined roads.
Karachi: Bahria Town Nature Recreation Area
In a recent article published by India's Scroll.in, Samira Shackle argues that "the reason a privatized city is so much quicker and easier to build is not down to the inherent superiority of the free market, but because it removes power from people and communities and centralizes it into the hands of one person or corporation". "This is the same dynamic at play in China, for example, where the nominally communist government has been able to build vast new towns and cities from scratch because it doesn’t have to worry about eminent domain or democratic accountability", Shackle explains.
As of 2016, the real estate developers had built over 250 gated communities across Pakistan. Hundreds more are being developed in response to rising demand from upwardly mobile Pakistanis.
Eden Housing Gated Community in Lahore, Pakistan
These communities cater to insatiable demand for world-class and well-appointed housing with modern infrastructure including well-built wide roads and reliable supply of water and electricity. Additionally, they offer various state-of-the-art amenities such as schools, hospitals, mosques, restaurants, theaters, shopping malls and parks located within secure communities, according to a report by Adrian Bishop, editor of Opp.Today.
Gated communities are being offered at multiple price points and payment plans that suit not just the rich but the middle class buyers as well. They offer condos (flats), townhouses and single-family homes on lot sizes ranging from 125 square yards to 2000 square yards. These communities are fueling a construction boom in Pakistan.
Defense Housing Authority (DHA), Bahria Town (Malik Riaz), Eden Housing (Aleem Khan), Emaar Properties (of UAE) and Ghurair-Giga (of UAE) are among the biggest developers of gated communities in Pakistan.
Bahria Town Islamabad
In addition to major Pakistani cities of Karachi, Lahore and Islamabad, new gated communities are being developed in second and third tier cities as well. Recently, Bahria Town announced its newest development of a gated community in Nawabshah, a city of just over a million residents in southern Sindh province.
Here's an excerpt of a 2013 AFP report on Bahria Town gated community in Islamabad:
Cars glide softly over the smooth tarmac carpeting the gentle hills of Pakistan’s largest gated community, past immaculate green verges dotted with statues of cattle — which, unlike their real counterparts elsewhere in the country, pose no threat to traffic. There’s a horse riding centre, a golf course, a posh cinema, an immaculately air-conditioned café and a mini zoo with “the only black panther in Pakistan”, whose growling excites young couples taking a walk. Elsewhere 20 metre models of the Eiffel Tower and Nelson’s Column — complete with lions — watch over this vision of suburbia which seems a world away from the rest of Pakistan’s seething, traffic-choked and crumbling cities.
