LAHORE: Pakistani real estate giant Rafi Group made a 10-fold profit last year from its sale of hundreds of acres of land in the remote fishing town of Gwadar, acquired soon after the government announced plans for a deep-sea port there.
The windfall came after 12 years of waiting patiently for the Gwadar port to emerge as the centerpiece of China’s ambitious plans for a trade and energy corridor stretching from the Arabian Gulf, across Pakistan, into western Xinjiang.
“We had anticipated the Chinese would need a route to the Arabian Sea,” Rafi Group Chief Executive Shehriar Rafi told Reuters. “And today, all routes lead back to Gwadar.”
Gwadar forms the southern Pakistan hub of a $57-billion China-Pakistan Economic Corridor (CPEC) of infrastructure and energy projects Beijing announced in 2014.
Since then, land prices have skyrocketed as property demand has spiked, and dozens of real estate firms want to cash in.
“Gwadar is a ‘Made in China’ brand and everyone wants a piece,” said realtor Afzal Adil, one of several who shifted operations from the eastern city of Lahore in 2015.
Last year, Pakistan welcomed the first large shipment of Chinese goods at Gwadar, where the China Overseas Ports Holding Company Ltd. took over operations in 2013. It plans to eventually handle 300 million to 400 million tons of cargo a year.
It also aims to develop seafood processing plants in a nearby free trade zone sprawled over 923 hectares (2,281 acres).
The route through Gwadar offers China its shortest path to the oil-rich Middle East, Africa, and most of the western hemisphere, besides promising to open up remote, landlocked Xinjiang.
2 million jobs
Last year, the Applied Economics Research Center estimated the corridor would create 700,000 jobs in Pakistan and a Chinese newspaper recently put the number at more than 2 million.
Authorities have completed an expressway through Gwadar, which has a 350-km road network. A new international airport kicks off next year, to handle an influx of hundreds of Chinese traders and officials expected to live near the port.
The volume of Gwadar property searches surged 14-fold on Pakistan’s largest real estate database, Zameen.com, between 2014 and 2016, up from a prior rate of a few hundred a month.
“It’s like a gold rush,” said Chief Executive Zeeshan Ali Khan. “Anyone who is interested in real estate, be it an investor or a developer, is eyeing Gwadar.”
Prices, which have risen two- to four-fold on average, are climbing “on a weekly basis,” said Saad Arshed, the Pakistan managing director of online real estate marketplace Lamudi.pk.
Regional fishermen have held strikes during the last two years, to protest against being displaced by the port.
To keep pace with the interest, urban officials are struggling to computerize land management and record-keeping. “We are trying to upgrade as fast as we can,” said Zakir Majeed, an official of the Gwadar Development Authority (GDA).
But Gwadar lacks basic education and health facilities, in contrast to the gleaming towers and piped drinking water of the “smart city” envisioned by the GDA.
“For commercial projects, things are moving fast,” Lambadi’s Arshed said. “But people actually living there, that will take a long time.”
Port officials expect the population to hit 2 million over the next two decades, from about 185,000 now.
The government commissioned work on the Gwadar port in 2002, but development was held up by chronic instability in the surrounding resource-rich province of Baluchistan, where ethnic separatist rebels have chafed against a military crackdown.
Since China announced the corridor plan in 2014, security has improved, with Pakistan setting up a new army division to ensure protection, while hundreds of rebels surrendered arms.
Real estate firms dismiss fears the “Gwadar bubble” might still burst, pointing to China’s enduring interest.
“The risk is always there,” Rafi said. “But our confidence comes from knowing this is not a Pakistani initiative, but a Chinese city on the Arabian Sea coast. And the Chinese will see that it is built.”