In a little over 50 years, the sleepy fishing village of Gwadar in South West Pakistan has been transformed into one of the biggest potential areas of South Asia for trade and investment. As a strategic port in the Balochistan Province on the opening of the Strait of Hormuz in the Arabian Sea, the area is an important focal point for the Pakistan government and in 2015 a $1.62 billion development programme began in the city.
Fast forward to January 2019 and Pakistan’s Prime Minister Imran Khan has repeatedly affirmed his country’s commitment to the development of the port. The city has been under the radar of Gwadar property investors for some time and all the latest news points to the next exciting period in the town’s history. Substantial plans are in place for 2019 in particular and as a result this is the optimum time for Gwadar property investment.
Gwadar has been compared to other success stories across the world such as Shenzhen and it has also been described as the ‘next Dubai.’ As we’ll see, there are many reasons why that isn’t merely a bold claim.
China’s role in Gwadar’s Development
As far as China is concerned, the development of the region forms a vital part of their future economic plans – the Chinese government is heavily invested in the development of Gwadar as the link between the $62 billion China-Pakistan Economic Corridor (CPEC) and $5 trillion Belt and Road Initiative (BRI). Trade and industry between the two nations is key to the growth of the city – together they make a powerful alliance, one that has vastly amplified the value of Gwadar property in recent years.
China has a significant financial interest in Gwadar: its importance is obvious to Pakistan but for the Chinese government Gwadar acts as the gateway to key markets in Central and South Asia. As part of the wider China-Pakistan Economic Corridor (CPEC) project, the Chinese government has committed over $1 billion to finance certain construction projects whilst looking to improve the infrastructure of the city and surrounding areas. Included in this overall commitment is the funding of major transport routes such as the $140 million pledged to complete the East Bay Expressway which will link the port to the major Makran Coastal Highway.
Expansion has been rapid and in 2016 it was confirmed that the China Overseas Port Holdings Company would be behind infrastructure projects worth $2 billion. This investment is intended to augment the wider Gwadar Special Economic Zone which is already playing a crucial role in helping industries grow and increasing the port’s cargo capacity.
In recent years progress has been swift with the city expected to provide 923 hectares of land for its free zone. Some 500,000 professional workers are scheduled to make their way into the region between now and 2023. They will all require places to work and live and that’s why for any property investor currently monitoring the developments a move into Gwadar real estate is definitely a logical one.
Gwadar’s Strategic Importance
In a country with a relatively short coastline, Gwadar was always going to be an important site for Pakistan after its acquisition from Omani rule. In terms of its location it is the largest coastal city in the south west of the country, in close proximity to the Iranian border. Apart from the obvious location of Karachi the government also makes extensive use of Port Muhammad bin Qasim but the addition of Gwadar represents a vital step for the nation’s economy in terms of sea trade.
In the 1950s, Pakistan commissioned a United States Geological Survey of Gwadar. The USGS duly reported that this was a suitable site for a seaport and Pakistan then entered protracted negotiations to purchase the city from Oman.
The Gwadar property market was essentially open from this point onwards, but initial development was predictably slow. A small wharf was opened in the port in 1992 with plans for construction of a deep-sea port unveiled a year later but a lack of funds hampered the project at the time. All that was to change when China recognised Gwadar’s potential and began to put its own financial weight behind the project.
It is close to key oil shipping lanes such as the Strait of Hormuz and is the closest warm water seaport to the landlocked Central Asian Republics. As a port and growing city on the Arabian Sea, Gwadar is therefore of interest to many countries in the vicinity, but it is the involvement of China that has really driven investors into this area of Pakistan.
The power of the two nations combined and the money being ploughed into the region therefore makes Gwadar property investment a shrewd consideration and the perfect time to secure Gwadar plots.
The landscape in Gwadar has changed dramatically in recent years and that growth is set to continue. In January 2019 Pakistan’s Federal Minister for Planning, Development and Reform – Makhdoom Khusro Bakhtiar announced further plans to bring Gwadar in line with other cities around the world thus bringing the port in line with international standards.
Bakhtiar also announced plans to make Gwadar a green, clean and environmentally friendly city. As part of this strategy, heavy industries will be located away from the city centre. Key transport links would still work in the favour of those industries while central Gwadar would become a pleasant place to live and work in.
This announcement was important news for investors who had already purchased a Gwadar plot but in reality the future of the region was already assured. From 2019 onwards, development work in Gwadar will ultimately lead to a brand new $300 Million International Airport with direct flights to major cities across the world. In addition, plans are already in place for a $10 Billion Saudi Oil City along with a $1 billion 300 MW Power Plant.
It’s no wonder that investors are drawn to the Gwadar property market from both a commercial and residential point of view. Property prices will rise considerably as further investment and infrastructure is announced.
So back to our original question – why Gwadar? Why should investors look away from traditional property hotspots and consider buying Gwadar plots in 2019?
Firstly, the fact that the port city isn’t currently on that list of ‘hotspots’ works in the investors’ favour. Gwadar has been described as the ‘new Dubai’ but real estate here is currently available at a fraction of the cost of certain sites across the United Arab Emirates.
Growth here has been rapid since China took a keen financial interest but it has also been sustained. Building development is booming with the airport, oil city and power plant on their way in 2019 and numerous meetings between the Chinese and Pakistani governments meetings promise continued investment for the long term future. Investors will know that there are no guarantees but these are enormously encouraging steps that underline the massive potential for financial growth. Gwadar real estate prices can only be expected to rise in 2019 so it’s advisable to get in early in what is essentially a ‘ground floor’ scenario.
Gwadar is also widely recognised as a safe and secure city so there are no concerns about the wellbeing of its residents. Some 9000 Pakistan army soldiers have been deployed here along with 6000 para-military forces personnel making it one of the most secure locations in the whole of Pakistan.
The comparisons to Dubai are very real and that’s why Gwadar should be seen as such an exciting investment opportunity. Another prosperous city Gwadar is comparable to is Shenzhen in China. Back in the 1980s and 1990s Shenzhen was the fastest growing city in the world. Like Shenzhen, Gwadar started life as a small fishing village whose value as a port location was eventually recognised. More parallels exist with both Gwadar and Shenzhen being granted special economic free zone status. Huge investment was poured into Shenzhen and while property buyers continue to target the city, much of that investment has now switched to Gwadar.
Shenzhen is now a global economic powerhouse and all that remains for Gwadar to complete the comparison is to match that status. The port is well on its way to achieving that aim: growth in the city is set to boom in 2019 and the pattern is expected to lead to financial increases in other areas so there may never be a better time to get involved in the bustling Gwadar property market.