REAL estate is among the murkiest and most underdeveloped markets in the country. And yet, residential and commercial property remains the most favoured asset for most Pakistanis to invest in.

The reasons behind their preference for property varies, though. Some investors feel it safer to keep their money in property than in more volatile assets. Others invest in real estate to earn interest-free profits. Many find it the best avenue to park their illegal and untaxed money.

Indeed, the launch of property portals is not only creating ease for investors but also helping bring a bit more transparency in the real estate market in the absence of good, clear policies and a market regulator.

Zameen.com, one of the fastest growing property portals in the country, is one of them. “We connect buyers with sellers and owners with renters across the country, and we are quickly becoming the central online hub for all things real estate in Pakistan,” Zeeshan Ali Khan, the company’s CEO and co-founder told Dawn in an interview.

Founded in 2006 with just four people working for it, the company has grown a lot bigger in size. “Today we have 300 people working for the firm and we plan to create another 200 jobs by the end of 2015-16.”

Zameen.com offers around 1.3m verified listings from 7,000 realtors across the country, and the number of visitors to the website has grown to 250,000 a month. The number of people visiting the site is evidence of the increasing usefulness of property portals for buyers.

“Over the years, the company has won two CNBC International Property Awards,” said Zeeshan. He had founded his first and successful B2B e-commerce portal in the United Kingdom in 2003 soon after obtaining his masters degree in chemical engineering from London’s Imperial College.

The wholesale/retail portal earned revenues upwards of £1m in its first year before Zeeshan sold it to return home and founded the property website, whose worth and revenues he refused to share.

The firm received its first foreign investment in 2012 when French investor Gilles Blanchard, who co-founded SeLoger.com — France’s largest property portal — saw the growth potential in the Pakistani market and decided to come on board as an angel investor.

In 2014, Zameen.com closed an investment deal with two venture capital firms — Singapore-based internet giant Catcha Group and the Malaysian-based Frontier Digital Ventures — which acquired a significant but non-controlling interest in the company.

The size of the country’s real estate market is assumed to be in the range of $200bn and $400bn, with overseas Pakistanis directly investing around $2-3bn in the property market

“When we started the portal we faced many challenges. Pakistan did not have the IT infrastructure. We knew it would take us many years to grow. But we kept building up,” mused Zeeshan.

“The investments by the angel investor and the venture capitalists have given a big boost to the company and helped it grow in size and capture the largest market share in the country.”

The number of website visits as well as the company’s revenues has almost doubled in the last one year. “After we got the investments, we hired more people and expanded our field presence to 16 cities, with offices in six cities. This year we plan to open offices in more cities. You need a big team and a large presence to run a property portal. Now we are also expanding into smaller towns and cities,” he said.

The size of the country’s real estate market is assumed to be in the range of $200bn and $400bn, with overseas Pakistanis directly investing around $2-3bn — or 15-20pc of the last fiscal year’s total remittances — into the property market.

“There is a lot of growth potential in the property market here, with a housing gap of over 9m units [Pakistan has 23m units compared with 57m in Brazil, which has about the same population, and a mortgage-to-GDP ratio of just 0.5pc, compared to 9pc in India,” the company’s CEO pointed out.

Similarly, he said, the construction industry here contributes 2pc to GDP, out of which housing is 1pc. “India was at the same level about a decade ago. After the housing boom there, it now stands at 9pc, 5pc of which is housing construction.”

Zeeshan said 90pc of the country’s property market is ‘grey’. The lack of public trust in the market owing to frauds in the absence of a regulator, as well as the unavailability of land data and vague land titles etc are major factors that are skewing the development of the real estate market. The limited mortgage market size is another factor constraining its development.

“These are the areas where the government needs to take quick action. The creation of a property regulating body, public sharing of land records and the availability of the past history of a property will go a long way in eliminating frauds, building public confidence and plugging the outflow of funds to Dubai and the UK,” he stressed.

In order to facilitate consumers and reduce the chances of frauds, Zameen.com is developing real estate indices. “These indices will help consumers know the past history of a property and judge its future price. They will also show the trends in the property business in different cities and localities to help the consumers make informed decisions,” Zeeshan said.

But the job of creating an efficient real estate market that protects the interest of buyers, sellers and tenants alike rests with the government. A private company or a portal can do only so much.

Published in Dawn, Economic & Business ,July 13th, 2015

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