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The CPEC opportunity

Published in Jan-Feb 2017

Malik Muhammad Ashraf
How CPEC can boost Pakistan's real estate sector.
Illustration by Creative Unit.
Illustration by Creative Unit.

China, buoyed by its rise as an economic power, is planning to revive the old Silk Route under the new concept of ‘One Belt, One Road’, an initiative that will eventually connect 26 countries. China’s Foreign Ministry shared the objectives of this initiative in March 2015, stating that: “One Belt, One Road is aimed at (i) promoting orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets; (ii) encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards; and, (iii) jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all.”

The China-Pakistan Economic Corridor (CPEC) is the most important component of this three-pronged initiative. CPEC runs from Kashgar in China to Gwadar via Karachi, and extends to Turkey through Iran. CPEC is a mix of projects that includes road networks, railway lines (connecting Kashgar with Gwadar), an optic fibre cable project, a dry port and energy-producing units.

The value of CPEC has been jacked up from $46 billion to 59 billion, because of the inclusion of new projects by the Joint Coordination Committee (JCC), in a meeting held in Beijing in December last year. These new projects include the development of Diamer-Bhasha Dam, Peshawar-Karachi Railway Line, Karachi Circular Railways, Orange Line trains for all provincial capitals, the Keti Bander Port, Special Economic Zones (SEZs) and three energy projects in Sindh.

As a result, CPEC is perceived as a harbinger of transformational change in the economic profile of Pakistan and other regional countries. Conceptually, the characterisation of CPEC as a game changer, a catalyst of economic revolution in Pakistan and an engine to propel regional economic prosperity is beyond reproach. The connectivity that CPEC will provide to the Central Asian states, and the likely inclusion of Iran, Turkey, Russia and some European countries will make Pakistan a hub of economic activity, with Gwadar facilitating trade with neighbouring countries, including China.

For a resource-constrained Pakistan, an investment of $59 billion in the projects under the umbrella of CPEC, presents the ideal platform to nullify the effects of past missed opportunities and embark on a path of sustained economic growth. For China, connectivity with Gwadar will provide easy access to the Arabian Sea and the expansion of its commercial interests globally. It promises a win-win situation for the region, specifically for Pakistan; a naturally endowed country with a unique geo-strategic location.

It is estimated that the cash inflow under CPEC will more than equal the Foreign Direct Investment (FDI) that has come into Pakistan since 1970, an amount that is forecast to equal nearly 17% of the GDP. Furthermore, CPEC projects are likely to create more than one million jobs in various sectors of Pakistan by 2030.

In addition to the direct economic impact of CPEC, economists believe that there will be a ‘multiplier effect’ and the volume of investments will increase manifold, as a result of the emergence of downstream projects and their spill-over effect into other sectors of the economy, specifically in real estate.

CPEC projects are likely to create more than one million jobs in various sectors of Pakistan by 2030.

Sources in the Planning Division of Pakistan, which is handling the CPEC initiative, believe that it will trigger a boom in real estate and that the property market is likely to experience a four-fold increase in the existing volume of commercial and residential projects in forthcoming years.

Although, due to the unregulated nature of the sector, official figures are hard to come by, real estate experts estimate the existing monetary value of real estate assets to be anywhere between $300 and 700 billion. In the last five years alone, there has been a growth of almost 118%, thanks to projects of key players such as Bahria Town, DHA, Paragon Constructors and Rafi Group, to name a few.

Industry stakeholders are unanimous in their opinion that the immediate outcome of CPEC has been a rapid rise in property values along the arteries of movement in suburban and rural areas. This has been particularly true for Havelian (the second largest municipality in Abbottabad District) where a dry port is being built and substantial FDI has been reported in the acquisition of residential and commercial plots in the adjoining areas. Properties that were considered worthless a decade ago have suddenly become the most sought-after pieces of land in Pakistan.

Real estate experts estimate the existing monetary value of real estate assets to be anywhere between $300 and 700 billion.

In Gwadar, a number of housing schemes and commercial buildings are under construction. As a result, land prices have almost tripled and the port city is expected to soon become one of the most in-demand real estate investment destinations in Asia. The Government of Balochistan, as well as private builders, have also launched housing schemes with modern facilities and amenities, as well as recreational projects to cater to the demand for well-equipped residential community projects by Chinese expatriates.

The Gwadar-Kashgar route will pass through Turbat, Panjgur, Besima, Surab, Kalat, Mastung, Quetta, Qilla Saifullah, Zhob, D.I. Khan, Mianwali, Balkasar, Hasan Abdal, Abbottabad and Gilgit. The acquisition of land for constructing road networks in these areas is underway and mainly supervised by the Government of Pakistan. The development of this extensive road network will ensure that previously isolated areas in Gwadar will be easily accessible, further contributing to an increase in prices. Several railway line projects are also planned along the route.

As a result of all this, there has been a corresponding increase in investment and development of retail projects. Furthermore, builders and developers in Faisalabad, Lahore and Multan have reported increased investor interest in properties there, due to which they expect prices to experience a further boost as more CPEC projects are announced and approved.

Another crucial avenue for CPEC-driven real estate business and investment is the planned development of SEZs. Eight such Zones are to be built, with one each in the four provinces, as well as in AJK, FATA, Gilgit-Baltistan and Islamabad capital territory. The exact location of these zones has not been finalised and consultations with provincial governments are underway. These Zones will serve as primary hubs of industrial activity in the country. The vision for CPEC is to establish a complete ecosystem that includes generating employment through manufacturing, a convenient commute via a well-connected transportation network, residential schemes for people who relocate there and commercial enterprises to cater to the daily requirements of residents. However, the lack of verified data makes it difficult to estimate the impact in the value of the real estate assets in these areas.

CPEC is poised to give tremendous boost to the real estate industry in Pakistan, which even otherwise, has a promising outlook, given that a 2.8% annual population growth rate (source: Federal Bureau of Statistics, 2016) entails that more housing projects will need to be established.

The writer is an academic and a freelance journalist. ashpak10@gmail.com

CPEC Old Silk Route The Silk Route One Belt One Road Diamer Bhasha Dam Peshawar Karachi Railway Line Karachi Circular Railways Keti Bander Port Special Economic Zones Gwadar port Bahria Town Paragon Constructors Rafi Group Government of Balochistan
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Comments (55) Closed



Abdul Raheem Feb 13, 2017 12:11pm
Provincial and Federal govts must build completely new cities at new long term sustainable locations. The current urban population of Pakistan are highly accumulated in top 7-8 big cities. It is problematic from multiple point of views, some of them are 1. Difficult to own a home for middle class due to overhyped land prices which are the result of demand/supply gap in big cities 2. In case of war, enemy can easily target big cities and paralyze the whole country 3. Overly big cities have their own traffic issues which even developed countries have failed to sort out 4. Quality of life becomes miserable when the population of city becomes more than what it was designed for 5. Last but not the least, small multiple cities are very easy to manage instead of places like Karachi and Lahore. etc etc Govt must build at least 10 new fully planned cities along the route of CPEC
Falcon1 Feb 13, 2017 12:30pm
@Abdul Raheem - "build completely new cities" ... You must be living thousands of miles away from Pakistan.! Otherwise you would know the pathetic state of the existing cities, towns and villages in the country. If the municipality or the Provincial government cannot even organize and coordinate garbage collection around Karachi, or the Federal government take responsibility to supply clean drinking water, or steady power, or security for citizens, do you expect them to build new cities and maintain them? With what, and who's going to do it?? Is there even a single decent government managed school or hospital anywhere in the country - much less a whole city that anyone of the 180 million souls could be proud of??
ABE Feb 13, 2017 12:37pm
@Abdul Raheem = Nice Fantasy and wishful thinking! We are talking about Pakistan, not China. where cities are rapidly build on a weekly basis because they have the resources, zeal and expertise to accomplish it. There has not been a new city in Pakistan since the 1960s when Islamabad was expanded. Then Ayub Khan was incharge. Does anyone expect the present leadership to accomplish anything except Metros and Motorways? Not in a million years!
atif khan Feb 13, 2017 12:41pm
theres a need to build new cities so that load can be shifted..But problem is does gov owns much land, because as far as i know most of the land in pakistan belongs to people not gov and then one they have they give it to people on reitrement. and by the way cpec will boost real estate market means we the pvt sector people working literally round the clock will find it more difficult to get a 5 marla plot for house .
ali asghar Feb 13, 2017 12:52pm
@Abdul Raheem sir your all suggestions are welocomed ,but it is very difficult to afford the cost of new mega projects.
Mohajir Feb 13, 2017 01:22pm
All money under CPEC is a Chinese loan that has to be repaid with 17% Guaranteed return in dollar terms. Who will repay this loan ?
Monsieur Feb 13, 2017 02:28pm
strange .... boost real estate??? but if the common Pakistani doesn't have the funds required who will be investing in Pakistani real estate ??? The Chinese??? very frightening concequences can be percieved
MSD Feb 13, 2017 02:42pm
@Mohajir You do not need to worry about it.
zeeshan Feb 13, 2017 02:43pm
@Mohajir ofcourse karachiites
atif Feb 13, 2017 02:55pm
@Mohajir Agreed...Yae ghalat baat hy ..Chinese will be eating into our money for our people...I dont like it at all :( ..we dont see the big picture ..we will get benefits but at extreme costs to us. I have no trust in China!
Saleem Feb 13, 2017 02:59pm
The state of our cities is absolutely atrocious. There is pollution all around, footpaths and parking bays are virtually non-existent, and traffic is a total mess. Due to a lack of low cost housing, there has been a mushroom growth of slums everywhere. Google Earth gives a good view of the sorry state of out cities. The govt must build new cities like Islamabad everywhere and demolish the old unlivable mess we have made just lie the Chinese have done in China.
kanwarch Feb 13, 2017 03:00pm
@Mohajir How about you Sir? For God sake please show some optimism and enthusiasm when you hear good news. I know it is difficult to believe.
Sam Feb 13, 2017 03:11pm
First of all you don't need to build new cities. Just expand the current ones, secondly the property prices are silly and over inflated, Asian countries the UK and some states in the US are already cheaper. That needs to be regulated or controlled. Last but not least build up not wide...sadly none of this can happen until these crooked realtors/politicians adjust the actual values of this land
Jamal Feb 13, 2017 03:24pm
Most of the jobs created in CPEC will go to the Chinese. We will get few of the blue collar ones only.
Pulak Feb 13, 2017 03:33pm
One country must not depend so much upon another. Looks like Pakistan has surrendered it's future to China. CPEC is heard everywhere like a lifeline to Pakistan.
A shah Feb 13, 2017 03:58pm
Please no more CPEC. Sick of hearing about it.
Schon Feb 13, 2017 04:16pm
I see a lot of comments from my indian friends regarding repayment of cpec loans,economic colonization of pak an etc.Let me clear a few things.cpec is merely not a road network ,it is a kind a marshall plan.Only 14 billion is for roads rest are energy related projects.somebody is talking abt 17% interest.it is joke of the century .34 billion is direct foreign investment by chinese commercial banks like any commercial venture offcourse guarded by sovergien guarantees ..rest is loan and by the way rate of interest ranges between 0.5 % to 1.5 %. Whoso ever is talking about 17 ,15 or figures like dat please quote any refrence.Actually what is agonoising for them is ;;failed state;; is going to be gateway to cars and a financial hub.please stop worrying about our debt and concentrate on your own issues.
Fried Chillies Feb 13, 2017 04:19pm
@Falcon1 China MUST do it. Rather it can easily do it even with the construction material that will be "wasted" during CPEC project. China should be held responsible for the wellbeing of Pakistan.
bryan Feb 13, 2017 05:13pm
@Schon The loan part is just a structuring matter, though an important one. They do not understand what goes into a project like this. I have worked close to 2 decades on Industrial Parks, Special Economic Zones, Ports, Free Trade Zones, Corridor projects. There are only 2 types of initiatives- bottom up or a top down. Top down and successful projects are those which have brought in few key aspects to ensure its sustainability- a. requisite infrastructure and phasing, b. backward linkages- utilities and market linkages, c. pricing d. social aspects. If not for the last one what we can get is at best is an Industrial Park- Yes it will be functional and create employment but its growth and metamorphosis gets stunted. It depends what you desire from CPEC- employment, exports or something beyond. If the above aspects are taken care- employment and exports will happen, but beyond that needs a cultural relaxation. This is not possible by banning stuff as happened today by SC.
Khwarizmi Feb 13, 2017 05:35pm
Please include a couple of science universities, especially in Baluchistan, which will help us on higher education as well as qualified workforce for the CPEC.
OMPRAKASH VARMA Feb 14, 2017 03:59am
@Mohajir Pakistan will become a market. Whatever industry Pakistan has today will disappear in view of cheap imported products from China. It will ruin Pakistan.
Muhammed Feb 14, 2017 09:19pm
@Khwarizmi Yes. China should build some technology related universities and technical know how center along the Baluchistan CPEC routes. I think they will do it eventually as they already made beautiful highways. Good schools will be followed by good and modern cities. It's natural First let the people work and love their own land, other people and those friends who is helping to create such an wonderful prospect for all Pakistanis and others as well.
Sarwat Feb 14, 2017 10:17pm
We have to have certain things in place first as this is an opportunity we simply can't afford to miss. Corruption has to go out the window. Education level needs to rise for every individual if we are to succeed in this endeavor or else we will end up as minions in the whole picture and the few opportunists will rule the rest. Not just a few highways would do this job we need a massive network of highways whose life span has to be 100 years at least. Time to start thinking as the big boys think, future planning.
Sarwat Feb 14, 2017 10:20pm
@Falcon1 PAKISTAN came into being, by dreaming about it, today it's a reality. Stop being a pessimist or unless you are our neighbor to the East.
Sarwat Feb 14, 2017 10:41pm
@Mohajir Then, stop voting for thugs, who only fill up their bank accounts. :-)
Shahzeb ABbasi Feb 15, 2017 03:52am
True benefits will only trickle down when the poor people living on these lands will be entitled for a fair price and not be harassed into selling their land for peanuts to politically backed developers or middle men. Also secondary cities in all provinces will need to strategically align themselves from these projects.
MSH NATH Feb 18, 2017 05:10am
Someone need to also do the maths along with noble wishful thinking. Where is the money going to come? Pakistan has an opportunity to learn to be rational from an economical perspective and treat real estate too as a resource or economical commodity. The cost should be pegged at what the returns are going to be, else the country will only be creating economic bubbles going up and away from common people and eventually bursting. Of course some may suggest leasing land to China, but at what cost? Temporary gain for some in power but long term uncertainties?
hasnain ali Mar 17, 2017 12:03am
I 'm thinking what benefits Do the people of Gilgit Baltistan will procure for this Gigantic project? We Gbians, better know what the people and rulers of Pakistan especially those from the region of Punjab had done with GB? They not only engulfed basic rights of Gbians but made us slaves. In the CPEC our role is nothing just to watch, because we are not capable enough to serve in high profile designation. What would be the role for a person with metric level of education? Most people of the region fell in this category. It happened due to lack of institutions. Infect some students acquire education from various cities of Pakistan? But they are not enough to lead the region? Gbians students had to lose everything, either it can be the Happiness of being with family, marriages of siblings cousins and in crucial moments of the family because they can't afford such transportation expenses and time form education, Still Gbians are keen towards knowledge and education. why with Gb?
b khosla May 16, 2017 06:04pm
Chinese investing in under developed economy to reap a golden harvest harvest. Invest now buy Land/property: its price will double in less than 5 years.
wazir ahmed May 16, 2017 11:26pm
is there anything for people of balochistan specially for people of gawadar.will it be beneficial for them ?
Kamal Gurgaon May 17, 2017 07:38am
2.8% population growth rate?????? That's like a population explosion. That means that with 4% growth rate Pakistan has been recording, the per capita growth is a mere 1.2%. Even with a 6% growth, that will mean a 3.2% per capita growth, the kind of figures seen in matured, wealthy OECD countries.
Jsmkumar May 17, 2017 01:22pm
Well said ABDUL RAHEEM.More over pollution of air,water, sound will cause lot of problems for human life. That is why small cities are best.Big cities around the world are causing trouble. Say China, India,Pakistan,Indonesia ,people are suffering with asthma because of heavy traffic.More over traffic jams are making life horrible.
Nianzu May 17, 2017 02:24pm
@Jamal "Most of the jobs created in CPEC will go to the Chinese. We will get few of the blue collar ones only." worry not, Pak brothers. CPEC for all. Blue collar jobs employ your poor uneducated people. Without job, they become terrorists. With jobs, no terrorism anymore. Trust iron brother. Salaam.
Nianzu May 17, 2017 03:13pm
@wazir ahmed "is there anything for people of balochistan specially for people of gawadar.will it be beneficial for them ?" lots of jobs. They work in shops along highway - eateries, convenience stores, mechanics, restaurants, security guards, fix tyre puncture ...lots of work. Many jobs for poor people. So no more terrorism. Only trust on iron brother. Together we are superpower.
simple facts May 19, 2017 09:35am
Real Estate will always remain outside the reach of the poor , the middle class, and the working class, only the rich will keep getting richer and empty plots will rise in value on paper only. Until Pakistan is seen to be a safe country,. from people outside this country, when cricket teams agree to come here voluntarily, when armed people and escorts are not to be seen in their 4x4 vehicles, when the rule of law and peace returns can Pakistan expect an improvement. This is not about C.P.E.C. it is primarily about ourselves as a nation. We think C.P.E.C. is a "game changer" that is absolute undiluted rubbish, we always wish to live another world, and C.P.E.C. gives our politicians gives them this opportunity, nothing more than hot air.
Addnan Gulzar May 21, 2017 12:07am
@Abdul Raheem : Couldn't agree more. I think it can be done though not with ease. Our power shortage would be the main cause. I mean look at Bahria towns all around, they are fully developed towns with in the cities, the technology can be expanded, experienced people and workforce won't be an issue. Only thing we need is the sincerity from the Nation & Leaders and off course security. I appreciate your suggestion & optimism. Let's all try to be sincere starting with ourselves and Pray.
jawdad Oct 12, 2017 07:48pm
It won't boost it rather will create a bubble like the one China is dealing and it's infrastructure loan projects around the world. Some of the African countries, Sri Lanka, Tajikistan are cases in point.
kumar Oct 12, 2017 10:33pm
@Mohajir Public will pay. They will have to sell themselves to repay. The lender is China and they are ruthless. Get prepared for 'good times'.
Pak Patriot Oct 13, 2017 02:31am
We must ensure that we use Pakistani building and finishing materials for these Housing Schemes. Such as Granite, Marble, Onyx and Paints.
Khwarizmi Oct 13, 2017 12:15pm
With 50 billions in loans? LOANS? What kind of FDI is this?
shahid Ahmed Oct 13, 2017 12:54pm
@Abdul Raheem good
Muhammad Mohsin Oct 18, 2017 09:36pm
CPEC will be bringing opportunities not only for real estate sector but for other sectors as well. Steel and cement industries has announced their investment as doubled (muneer malik chsirman PSX). See the potential in milk sector, Olpers market share is crossing 30% within five years against market share 40% of world biggest company in milk industry. Cocacola has announced $33 m in Pak to cature the middle East and Central Asian market. Similarly, CPEC will ehance the value of Pak geographical location. Pakistqn is labour intensive as well as raw material (agriculture) exporting country. Chickpea (3rd) Apricot (6th) Cotton (4th) Milk (5th) Date Palm (5th) Sugarcane (5th) Onion (7th) Kinnow, mandarin oranges, clementine (6th) There is hightend opportunites for foreign investors investors. And yes! Local investors can target middle east, africa, central asia to europ. At govt. Level... there can be a ministry of branding to support local investors.
Sid Dec 19, 2017 02:10pm
The Real estate boom will prove to be a curse for local populace.... the Chinese will sell and lease a foreign land at their prices.... crazy picture being assumed....
Ravi Dec 19, 2017 04:45pm
CPEC will benefit only China and Pakistan will get completely sucked in debt trap. Forget about real estate boom. It’s far from reality
citizen Dec 19, 2017 08:21pm
Certainly CPEC will propel us in to the league of US/UK/France/Germany/Norway and next only to china in Asia...With China we will dictate th new world order.. Wait and see...
Sid Dec 19, 2017 09:20pm
@ABE you may have a point but motorways and metros are needed in all major cities. Don't deride good work selectively
Kau Dec 20, 2017 12:50am
Good luck. Look at as to what has happened in Australia,New Zealand, USA and Canada I am told the locals in these countries can not afford to buy houses or apartments in I will leave it at that
Albela Dec 20, 2017 06:18am
Every common Pakistani should be provided access to CPEC loans to meet their financial requirements.Chinese commercial banks should set up banks in Pakistan to disburse loans to Pakistanis at profitable rates as decided by China.
Lady Luck Dec 20, 2017 09:10am
@Falcon1 In those 180 million souls, you are referring to, none is a human being (including you and me ) ? I thought, human beings, try to improve their conditions, while the animals, rely on the nature, or others to improve their conditions.
Aly A Ercelawn Dec 20, 2017 11:43am
Why promote parasitic capitalism?
Asim Dec 20, 2017 12:48pm
@kanwarch How can taking a loan be a good news? It is still not clear if Pakistan is obliged to return (with interest) the chinese investment or china will only get its investment back from the profits.
Asim Dec 20, 2017 12:49pm
@Pulak It's our habit to think of someone coming from outside to solve all our problems.
AQ Dec 20, 2017 02:56pm
How much will it boost? its already got out of hands of common man. Only multi millionaire can afford a place to live. Such pathetic policy for development Pakistan govt has made. Just for elites. This has to form for all people. Govt can provide low price land at least to people but no, they sell the land in billions to business men who then sell it after multiplying by 10 -100.
AQ Dec 20, 2017 02:58pm
@Falcon1 Abdul Right got right point for building new cities, the more dense population of city create more issues.
Jamal Dec 21, 2017 12:30pm
The "investors" would make it more hard for the middle class to buy a property in the cities.