How technology will redefine Pakistan’s Real Estate Sector
Shafiq Akbar is a Cambridge alumnus and a highly successful entrepreneur. He returned to Pakistan after living in the UK for 15 years. As an accomplished investment advisor and real estate developer, he not only created thousands of jobs for the Pakistani youth, but also established a conglomerate of 7 companies.
He is the Chairman and Founding Chief Executive Officer of Graana and Imarat Group of companies. He is also the Chairman of Agency 21 International. He brings considerable real estate development and international business experience to the group. He talked extensively to Safety & Security Today and gave an insight into his vision to transform Pakistan’s Real Estate sector.
S&ST: Tell us something about your educational and professional background?
Shafiq Akbar: I hold an MPhil degree in International Relations and Affairs from the University of Cambridge and a Master of Science in Public Policy from Queen Mary, University of London. I started my career with Hyundai Engineering & Constructions where I was appointed to several mega projects including Chashma Hydro-Power Project and Pirkoh Gas Compression Power Plant. While in the United Kingdom, I worked with one of the top realtors, Douglas Allen.
I then went on to explore entrepreneurial arenas and set up brands such as Homzz Construction Ltd, Homzz Investments, Hotspots Rental Management and Steptons Estate Agents. I returned to Pakistan after having lived in the UK for 15 years. I’m successfully running many initiatives such as Graana, Imarat Group of Companies, Association of Overseas Pakistanis, Iqbal Institute of Policy Studies and Builders and Developers Association to reform the real estate development and the construction industry in Pakistan.
S&ST: What was your motivation behind returning to Pakistan after living in UK for fifteen years?
SA: My only motivation for coming back was that I wanted to bring a change. I believe that one should always have some dream in life. My dream right now is to transform and revolutionize the Real Estate sector in Pakistan. If I achieve this target I would be very happy.
S&ST: You set up brands like Homzz Construction Ltd, Homzz Investments, Hotspots Rental Management and Steptons Estate Agents in UK. Tell us something about these brands?
SA: Our prime area of expertise has always been Real Estate. Real Estate, to me, is not just buying or selling, it’s a massive sector. 90% of the global wealth, somewhere around $ 286 trillion out of $324 trillion, is in Real Estate. The gross value increase or capital formation of any country, which makes up around 50 to 60%, is through Real Estate development. When I talk about Real Estate, it is Real Estate development, Real estate dealing, Real Estate technology portals, institutional Real Estate, allied industries and ancillary industries. All my companies have been primarily involved in the Real Estate sector.
S&ST: How was the idea of Graana conceived?
SA: Graana was needed because there was a desperate need for a smart digital property portal in Pakistan. Graana is a tech company. Just like Uber’s main service is a ‘taxi service’ that is supported by an app, our main services and products are related to real estate supported by the technology which we call Graana.com.
S&ST: How will digitalization help the Real Estate sector?
SA: The major issue we face in Pakistan is that we lack data and don’t have access to accurate information. This means that more than 50% of the investments are under ‘inescapable capital traps’. When you’re investing, you don’t know if you’re taking the right step or not. To digitalize Pakistan’s Real Estate sector, we’ve set up a company called Prop Sure digital solutions. We’re digitizing whole of Pakistan that includes every residential and commercial unit. We have around 8 million planned units, out of which we have completed nearly half. The rest of them will be completed by the end of this year. The scattered data and information, when consolidated, will help people assess actual worth of real estate assets. The more data and information we have the more attractive it will be to investors.
S&ST: One of your projects is Imarat Builders Mall. What is the idea behind the project?
SA: Right now our construction industry is heavily dependent on imports. Growth in the Real estate sector will further increase our import bill, which we are already struggling to control. In order to cope with that, we’re setting up ‘Imarat Builders Mall’ which is a one stop solution for all building material. At the same time, we’re trying to set up production, assembling and manufacturing units of building related material in order to increase our capacity. By increasing industrial and real estate growth, at least 60,000 new jobs would be created. Imarat Builders Mall is a start for us towards a new vision to end Pakistan’s reliance on imports for the Real Estate sector.
S&ST: There’s a view that lack of regulatory framework and policies have led to the mushroom growth of substandard Real Estate projects across the country. Do you agree with this view?
SA: This is true, regulation of the real estate sector is quite lax. The lack of regulation has created multiple issues, frivolous litigations being one of them. Other issues include time involved in disposal of real estate-related court cases and tedious procedures when it comes to acquiring governmental permissions for Real Estate ventures. Lax regulation has also cost people tens of millions of rupees because a lot of projects are declared illegal by the government years after their launch when people have invested their hard earned money in these projects.
S&ST: There has been talk of setting up a Real Estate Regulatory Authority (RERA). How do you view this?
SA: Regulation of the Real Estate sector is need of the hour. However, if a body is being set up to regulate the Real Estate sector it must be a participatory exercise. Real Estate developers and real estate agents are important stakeholders and their input would be invaluable. Policies and regulations will only be effective when they are made in consultation with the relevant stakeholders.
S&ST: Is lack of regulation a stumbling block for foreign investors?
SA: Definitely. We are trying to highlight that effective policy making and its implementation is the prime factor through which investors could be attracted. Unless we have policies that facilitate the real estate sector we won’t be able to fully utilize this massive potential.
S&ST: You have talked extensively about digitalization and the need for better regulation. What other areas do you think are neglected in Pakistan when it comes to the Real Estate sector?
SA: Universities around the world have been offering PhD programs in Real Estate. Unfortunately, in Pakistan there has been very little focus on Real Estate education. There should be certifications and degrees in real estate education. We have agreed with University of Engineering and Technology (UET) and some other well reputed universities to introduce Real Estate related programs. We’re also teaming up with National University of Sciences and Technology (NUST) and have set up an innovation lab and a research center there.
S&ST: Affordable housing is a major concern in Pakistan. In your view, is there any viable way to provide people with Low Cost Housing?
SA: The concept of welfare states, which is being talked about a lot in Pakistan these days, has different forms. For instance, in the United Kingdom, you’re provided child benefit, unemployment benefit and housing. The share of housing provided by the State, also known as council housing, is less than 5%. The rest of the demand is met by the private sector. In case of Pakistan, I think the total percentage is going to be even lesser, maybe 1 to 2%.
According to State Bank of Pakistan, the total cost of a low cost house is 3 million. As far as its viability is concerned, yes it can happen. We can provide a house within 3 million. But whether it will be done or not is another question. In China’s urban areas more than 60% of the population lives in houses that were built in the last 10 years. But in case of Pakistan, for now, we lack the resources and policies to achieve construction on this scale.
S&ST: You’ve set up successful brands such as Graana, Imarat Group of companies and Agency 21 international in Pakistan. What made you set up Iqbal Institute of Policy Studies (IIPS), which is obviously different than all of your previous ventures? Also tell us something about its objectives?
SA: One fix to all problems is intelligent policy design and its effective implementation. IIPS is a policy institute. Policy institutes do research and make policy recommendations to the policy makers at the State level. Pakistan needs policies, good policy designs and their effective implementation. For effective implementation, the use of technology is of utmost importance and the good thing about technology is that you don’t need a lot of infrastructure and investment to make use of it. Pakistan can make use of its large tech pool and go towards automation in every field that would increase our efficiency and productivity by many folds.
IIPS has recently taken an initiative on child mortality, since Pakistan has one of the worst newborn mortality rates. We have done research and have a policy design ready for its implementation. Now we will launch a pilot project at a selected district that would be supported and funded by IIPS to show how to implement it.
We have engaged top Pakistani tech professionals from around the world who are working on concepts like Blockchain and Artificial Intelligence to make use of technology in every sector.
S&ST: You’re an entrepreneur who has been successful all along, particularly in Pakistan. Where do you see yourself and your company after ten years?
SA: We’re trying to be a 1 billion dollar company by the end of next year. Today, we have more than US $300 million worth of portfolio projects. In the next fifteen years, we want to fulfill 2% of housing demand along with commercial and hospitality projects. We’re also bringing three International hotel chains in Pakistan.
S&ST: Any message to the readers and any advice to the government?
SA: I think we as a Nation have to be positive. We should learn to appreciate each other and work together for the common good. We have become negative in general. We need to cut out the negativity and practice positivity within us. Moreover, I would request the government to ensure the effective implementation of policies by making use of technology.