Positive market vibes jack up LDA City property rates

Lahore Development Authority (LDA) launched the LDA City project back in 2014. It attracted investors due to the involvement of many big-budget real estate developers. Set to become the largest residential project of Pakistan, the society was planned on 60,000 acres of land. Various property files, for 5-marla, 10-marla, 1-kanal and 2-kanal plot sizes, were issued by the development partners.

The background

Being a project of Lahore Development Authority (LDA), the project had been in the news for quite some time. The former LDA director generals also instructed the officials concerned to hold a ballot for allocation of plot numbers, which is yet to take place. Please note that due to expected announcement of ballot date, the market rate of LDA City files has also fluctuated.

What went wrong?

Land acquisition for the project had been going on for a while now, but development partners could only acquire their holdings in bits and pieces. This made it difficult for the LDA to continue aggressively with the planned pace of development work.

Furthermore, LDA also issued various deadline for file owners to get exemption letters against their respective files. The development authority was to include only these files in the ballot previously planned in March 2018. With almost one year elapsed, balloting has still not taken place.

In the meanwhile, issues regarding the over-selling of property files also surfaced. This news made file owners anxious, as many of them were small investors with their lifetime saving on stake.

What’s the latest?

The Supreme Court of Pakistan took up the case to provide relief to the concerned file owners. The apex court ordered the National Accountability Bureau and the Punjab Minister for Housing and Urban Development Mian Mehmood-ur-Rasheed to chalk out a workable plan to compensate 9,000 file owners.

Under the new management, LDA also worked its way forward to help address their concerns. Complying with the SC’s orders, Rasheed directed the LDA to take immediate steps to compensate the aggrieved faction. In this regard, he also advised LDA to bring new development partners onboard.

Furthermore, the housing minister ordered coordination with Punjab Revenue Department to verify the ownership of 4,000 kanals of land acquired for the project. He also instructed LDA to resume development work on the area located along Buchar Khana to compensate the affectees. The project is now slated for completion under various phases.

Reportedly, LDA has also formed terms of reference (TORs) to allot plots to the owners of 9,000 LDA City files.

The project may shrink!

Acquisition of 17,000 kanals of land in Mouza Toor Warraich appears doubtful due to land consolidation issue. The SC had suspended Section 4 imposed to assure smooth acquisition of land for the project. This now suggests that the project may shrink to 40,000 kanals.

In the meanwhile, acquisition of land in patches goes on in a bid to accumulate ample land to resume development work. According to Rasheed, land handed over to LDA by development partners is scattered into pieces. The authority however has ample consolidated land in store to compensate the above-mentioned file owners in the first phase.

How does the market respond?

As soon as the SC took the case, veteran investors started to purchase LDA City files. Real estate dealers and other buyers followed the trend. This resulted in a high demand for these files and caused rates to go up. Our sources have revealed that in a period of less than one month, market rates of LDA City property files went up by over 30%. The price appreciation ratio was almost the same for all plot sizes.

Market rate of a 5-marla plot file jumped from PKR 1.2 million to PKR 1.8 million. It currently stands around PKR 1.76 million. The price of a 10-marla plot file currently hovers around PKR 2.65 million, while that of a 1-kanal file amounts to PKR 4.5 million.

What can we expect next?

Further appreciation in the rate of LDA City files depends on announcement of ballot. The market situation will improve even more when development work resumes. Under the current circumstances, the likelihood of such developments appear possible. You too can make use of this information to score solid returns on investment in the medium-term.

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