Gwadar, the gateway to the China Pakistan Economic Corridor (CPEC), comprises of projects worth over $62 billion. CPEC is part of the Belt and Road Initiative (BRI), which aims to promote infrastructure connectivity across Europe and East Africa via infrastructural and industrial developments, modern transportation networks and special economic zones (SEZs).
When the CPEC was launched in 2015, policymakers from both China and Pakistan planned it out as a three-phase program. While the first stage—from 2016 to 2020—focused more on setting up the groundwork for energy and transport sectors, the second stage, which is the ongoing phase, will be based around both countries aiming to establish and strengthen industrial development by 2025. The third stage, set to end by 2030, will build on increased regional connectivity, industrial growth, trade and economic development.
In this piece, we’ll explore the second phase in detail.
Gwadar – The Future of Industrialisation in Pakistan
Gwadar is home to one of the deepest seaports in the world built over an area of 2,281 acres, with the capacity to handle 50,000 DWT bulk carriers. The port currently has three berths, each of which is 200 meters long. Moreover, the country’s largest airport – New Gwadar International Airport – is also being developed in the city over an area of 4,300 acres, with upgraded terminal structure and other facilities, including a cargo terminal with refrigeration for perishable commodities. The greenfield airport will have 30,000 tons per year handling capacity.
So, how exactly the CPEC, and the development of Gwadar, in particular, will help bolster Pakistan’s economic growth?
The significance of Gwadar’s deep seaport can’t be emphasized enough; it plays a pivotal role because it acts as a transit point for trade in the region. It wouldn’t be wrong to say that the CPEC, including the Gwadar port, is a reincarnation of the ancient Silk Road, which connected China with other parts of the world for trade via Pakistan.
The core idea is to turn Gwadar into a logistics and industrial hub. Even though Pakistan is home to two other international ports – Karachi Port and Port Qasim – the addition of Gwadar Port will help shoulder more load and boost transit trade for a sizable revenue stream. The projects to supplement the port operations include access roads, water, gas power, internal roads and warehouses among other infrastructural developments.
Why is this the right time to invest in Gwadar? As discussed above, the CPEC, as of 2022, is in its industrial cooperation phase, which, in addition to the establishment of SEZs, includes the creation of the Gwadar Free Zone (GFZ). The first phase of the project has been completed which is developed over an area of 60 acres. So far, 46 companies have been registered for investment in Gwadar Free Zone and 3 have already started production. One of the biggest advantages to these companies is that they’ll enjoy permanent tax exemptions. What’s more, the second phase of GFZ, which is spread over 2,221 acres, is in full swing. During his visit to Gwadar in July 2021, Prime Minister Imran Khan did the groundbreaking of the Gwadar Free Zone (Phase-2). It’s expected to be completed by 2025.
Another contributing factor is the construction of New Gwadar International Airport, which is all set to be completed in 2023. With this major development, Gwadar will possess yet another means for transportation and trade, especially for perishable items. Consequently, the launch of the airport is expected to open new avenues and revenue streams for the city from all across the globe.
Mr. Shazil Rafi, Managing Director (MD) of Rafi Group, helped shed more light on investment prospects in Gwadar. “CPEC is a USD 62 billion project,” he said, before adding, “Gwadar has come a long way from where it was five years ago and where it will be in the next five makes it even more interesting. This is the time to enter into this market and enjoy the benefits of the smart industrial port city.”
The province of Punjab is the largest in terms of population and a major contributor to the GDP of Pakistan. With the development of the port city and the international airport in Gwadar, we’ll witness a meteoric ascent of Pakistan’s economy. Let’s not forget how international tourism also plays an important role here.
Thanks to the CPEC, the construction of resorts, residential communities and hotels to facilitate tourists and future residents is also picking up pace. Make no mistake, early real estate participants in this race will definitely be at an advantage. Commenting on this aspect of property development in Gwadar, Mr. Shazil Rafi said, “Gwadar will prove to be a game-changer in 2023. It will have better connectivity and once it has that, the projects that are already developed will be the most preferred locations for investment.”
In addition, during a February press conference, Special Assistant to the Prime Minister on CPEC Affairs Khalid Mansoor revealed that China would support establishing a steel and metal recycling plant in Gwadar in the next three years. The facility will produce metal for exports worth USD 4.5 billion and will create about 40,000 new jobs. For people working in Gwadar, quality and affordable residential units will also be required and this is where private developers come in.
What Does The Future Hold In Terms Of Investment In Gwadar?
It’s a well-documented fact that the Covid-19 pandemic, which upended the world as we knew it, failed to hinder the progress in Gwadar. As soon as nationwide lockdown restrictions were revoked, development work on crucial projects like New Gwadar International Airport and Gwadar Free Zone resumed, at full throttle. By 2025, Gwadar will be more livable, better connected and present Pakistanis with new opportunities to thrive.
Projects like Eastbay Express Way—a six-lane urban motorway that will connect Gwadar Port with Gwadar Free Trade Zone and Makran Coastal Highway—will further enhance Gwadar’s connectivity and add to the overall aesthetic of the city.
Gwadar’s transformation from a fishing village to Pakistan’s next thriving metropolis has attracted the interest of major private land developers from across the country. The port city is witnessing the development of a wide range of state-of-the-art residential communities and commercial projects. Green Palms, Golf City and Naval Anchorage Gwadar are just a few noteworthy examples in this regard.
“Gwadar’s real estate is pulling investment from across the country and for good reason. A small investment today will give you substantial returns in the future and that’s how Green Palms has been positioned. It’s an affordable real estate project with built-in life insurance—available on a convenient installment plan—that will be a valuable addition to your investment portfolio,” Mr. Shazil Rafi stated. It’s important to mention here that the launch of industrial and other mega projects by 2025 will boost the value of such residential properties in the future.
Gwadar’s Role In Tackling The Challenge Of Housing
Pakistan has an ever-increasing need for residential units and considering the business opportunities in Gwadar, the city is ideal at the moment to encourage people to invest there. The city has the potential to reduce the deficit of residential units in the country significantly.
Projects like Green Palms and Naval Anchorage are being developed on more than 1,000 acres of land, backed by renowned and seasoned developers, which is all the more reason for potential buyers and investors, not just in Pakistan but also abroad, to explore what Gwadar’s real estate has to offer. Just recently, Green Palms by Rafi Group launched its Overseas District which has caught the eyes across Pakistan as well as overseas. Rafi Group —Pakistan’s leading real estate developer, with many successful projects under its belt — has put in a lot of research and effort in making its product customer-friendly and some of the factors that contribute to its appeal include affordability, fast-paced development, built-in life insurance and a flexible payment plan.
Moreover, Rafi Group recently signed a unique agreement with IGI Life Vitality Insurance Company to facilitate its customers with an investment inclusive of life insurance. The trendsetting developer has continuously made efforts to create value for its customers using its product and, with the latest value addition in the form of built-in life insurance, the benefit of investing in Green Palms Gwadar extends beyond monetary gains. How? Another case in point: Rafi Group has customer interaction centres across the country to cater to the masses and that’s not all. The group also has established special means to facilitate overseas Pakistanis.
“About 25% of our clientele is overseas Pakistanis who can invest and make regular payments through Roshan Digital Account (RDA) and other online banking channels,” Mr. Shazil Rafi explained, adding, “Gwadar has drawn the interest of local as well as overseas investors. The developer’s ability here is to identify the right commodity and make it available to the public at affordable prices with the convenience of payment methods so that buyers don’t second guess their investments.”
Gwadar – The Future of Hospitality & Tourism in Pakistan
The next three to four years are crucial for Gwadar and the developers who can keep up with the city’s development pace will prosper. While many developers are establishing gated residential communities, projects that are more tourism-focused are also in the pipeline including hotels and resorts. It’s a good thing considering Gwadar’s pristine coastline is already quite a popular tourist destination, especially for travellers from nearby concrete-laden cities. Talking about the future of Gwadar and its real estate sector, Mr. Shazil Rafi stated, “We want to be synonymous with Gwadar and that is our drive. We believe what we are doing is in the interest of the country.”
The industry expert believes that with CPEC progressing on the right track, logic dictates that Gwadar deserves a few more years to gain momentum. “While China is working on the industrial infrastructural development side of Gwadar, Rafi Group is making significant contributions to the real estate development and hospitality framework of Gwadar,” he said.
What are your thoughts on the CPEC? Do you think the time is ripe for investment in Gwadar? We would love to hear from you. Please write to us at blog@zameen.com. For more exciting insights on Gwadar and the real estate sector of Pakistan, keep reading Zameen Blog.
