Walking out from under his father’s shadow, Dascon Construction, Shahnawaz Ayaz Durrani set up his own, DCC Developers, launching ‘Address 73’. His project, he insists, is different from the plethora of luxury apartments hitting the market. According to him, here is why.
Apartment living also has a lot of complications. From garbage removal to elevator maintenance can be a nightmare. Then there is the walk to and from elevator to the apartment; if long it is psychologically draining, impacting resident satisfaction. Such things are not visible on the plan, but hit people once they live there. Address 73 has given such factors due consideration. The cargo elevator meant for garbage etc. is at the back. From welcoming to maintenance staff, the project will be like any five star hotel, apart from room service.
The building would be covered in weather-insulated façade, which no other building in Pakistan is, the Packages Mall being an exception.
Most project owners interviewed by Profit held forth that they would be transferring land ownership to customers, to Durrani it is a terrible idea. “In jointly-owned land, there is no boundaries demarcation. If land ownership is transferred, the part of location a client wants would an intractable issue”.
“It would also be a hassle for customers to get separate registrations for apartment and land. So rationale demands that only the property rights of the apartments are transferred.”
For contingencies like earthquakes and fire being – risk factor being higher in vertical buildings – the building is earthquake proof up to over 10 Richter scale. Two non-slippery fire escapes are strategically located; the walls and paints are fire resistant.
The project was to be completed in two and a half years, the deadline being March 2018. It would be delivered in the next six months – ahead-of-time completion a nice surprise for most clients.
He aims to make Address 73 a flagship project for his company and for his own reputation. “I am looking to exceed the promises I have made to my customers, giving them more amenities and higher finishing level – at no additional charge.
There are plans to provide resale and renting services to owners, at no commission. If customers wish to rent or resell their apartments, they come to us. This is not a contractual obligation yet, but we might add it in the contract.
The block will have a governing board, deciding on changes required. There would also be rules to follow. For instance, drying clothes on the balcony would not be allowed as it spoils the façade for everyone.
The apartments startup sale price was Rs12,000 per square feet. Durrani anticipates it should be double that.
It is not the value-addition of the place that matters to clientele but prefer security, amenities and freedom from the hassle of managing big houses, with many servants, and management costs. He has kept one of the three penthouses for himself and plans to live in the block. “In the next 10 years I see myself living in and running the project – hopefully the first of many, exhorting other developers to follow the high-end aesthetics and facilities.”
Florets Luxury Apartments offering 56 two and three bedroom apartments at an average price of Rs15 million, said Marketing Manager Faisal Azeem while talking to Profit — which translates to per sq. ft. price of Rs12,400.
Constructed by Abbas Developers, designed by Ayes Associates UK Ltd, with its tagline “Simplicity is the ultimate form of sophistication”, Florets has chosen to keep its prices lower and target market wider than projects like Hyde Parks and Opus Luxury Residences.
Commencing construction in December 2016, aiming to complete in December 2019, Florets is built on LDA’s revised rules: 80 feet height, with ground plus six floors. It covers a total area of four kanals and has apartments ranging from a covered area of 925 sq. ft. to 1680 sq. ft., in addition to penthouses.
It was on the grapevine that cricketer Wahab Riaz was also a silent partner in the project, but Fasial Azeem denied this. “Wahab is a very good friend of our CEO Ghulam Abbas, and while he attends our functions, he has no stake in this business.”
Most of Abbas Developers’ portfolio is located at Lahore, though it also contains Bahawalpur Pace, Bahawalpur Trade Center, Awan Plaza and SITC Hospital in Bahawalpur, while Bismillah Tower, is Gulistan-e-Johar in Karachi.
The brochure of this purely residential block boasts of facilities like fully-equipped kitchens, attached servant residences, gymnasium and swimming pool (with complimentary membership for two years), rooftop garden and guest rooms. Generators, elevators, car parking with 75 slots, fire safety and maintenance are also mentioned as features on offer. The project’s website also mentions provision of in-house first aid facility for 24 hours, and on-demand monthly rental service for individually furnished apartments.
Every year between 800,000 to a million families move to Lahore, said Faisal. With prices reaching up to 40 lacs per marla in Garden Town, vertical living is the best, if not the only answer for such families. “It’s builder’s responsibility to make such residences available to people.” In the very next breath though, he mentioned that nearly half the apartmentsso far snapped up have been taken up by people already residing in Garden Town. “For them location has not been as important a factor as all the amenities at Florets.”
There is a three-year flexible installment payment facility available to the customers with a 10 percent advance payment and at least 30 of the 56 apartments have already been booked. Happy at his project’s success, he said, “Location-wise we don’t even consider any other project as our competition. We have three dimensional access to parks, with educational institutions, shopping and entertainment areas as well as hospitals in close vicinity. Moving out of the city within minutes through Thokar Niaz Beg or to approach The Mall and old parts of the town through signal-free Ferozpur Road or the Gulberg Main Boulevard is also a benefit.”
CEO Ghulam Abbas had said while talking to media awhile ago, “We wish to request developers to start vertical movement and eliminate the concept of four and eight kanal houses, for around 50 families can be accommodated into 4-5 kanal plot, in a secure environment. With apartments becoming common, almost 90 percent of the population will be living at the same standard and fewer people will be subjected to such status sickness. This sickness leads to frustration and corruption.
“There is shortfall of ten million houses in Pakistan. According to our real estate analysts 700,000 houses are needed every year but only 250,000 houses were being constructed, which adds to the shortfall. So government should also keep its policies benign towards real estate business because the industry is supporting employment in the country.”
Umer Elahi, Project Director Empire Holdings, began his project Opus Luxury Residences in the early 2016, hitting a roadblock soon after. Umer explained that abrupt halt was because the government raised taxes on real estate. “We had the permission but the project had not been started. That’s why the confusion, over reapplying for the clearance from FBR and LDA or commencing work, forced the 2-3 month break on us… The people in LDA themselves weren’t aware of the laws… We still don’t know everything, but we decided to go through with it because we can’t wait forever.”
Coming from textile manufacturing and trading business, Umer has decided to invest himself in residential projects with Opus being the first of many that he wishes to build.
Comprising of 42 apartments on ground plus six floors with two basements, Opus offers the affluent two and three bedroom apartments and penthouses, with tab range between Rs17 to Rs30 million. Thus far only four to five apartments have been taken.
While Umer is aware that Lahorites might not yet be enamoured with the idea of vertical living, he is confident the trend will catch on. “New generation is coming, and change is inevitable. 3G, 4G and Uber, Careem are perfect examples. They are not a luxury anymore, they are a necessity. It’s not optimism or prediction, but apartments are the future.”
Three out of his five clients, however, are overseas Pakistanis. “One of them lives in the US and owns two houses in DHA. He comes to Pakistan twice a year but cannot live in his houses because there is always something wrong, pipes are blocked, ACs or something else are out of order. He plans to sell those houses and buy more apartments. He asked us whether we could take care of his apartment in his absence; we said, yes, for a charge, until we are managing the building. Such concerns are very important to people and they prefer apartments over houses.”
He believes. Lahore is not accustomed to vertical living because of height limit. “Here we have 80 feet, which personally speaking is nothing. In that limit you can go ground floor plus six which doesn’t even allow the cost to be divided, because land is a major cost. It makes up for 30-35 percent cost, and if you can’t divide the cost, how can you give affordable living?” He added, “Land availability is also limited now. There is no other option apart from going vertical. In fact now LDA has also made it a compulsion to allocate some part of the land to apartments even in housing societies. LDA has approved some 30 odd projects and 26 more are in the process of being approved.”
Proud of his project, Umer said with a smile that his luxury apartments are providing housing and amenities at a price which is not possible to have in a house. Even if someone is able to build a house in the same cost, he will only have a brick and cement structure without air conditioners, pool, gym, security, standby generator capacity, and kids’ play area. “You can’t have 50, 60 people in your house for your child’s birthday but we are providing a 12,000 square feet rooftop with a proper seating area. This is a whole community in itself with everything in the same place which provides a lot of convenience, especially in modern-day hectic lifestyle.”
In addition to all this, Empire Holding is also providing its customers with kitchen and electrical appliances, and smart metering with a standby backup support of power generation.
Umar also plans to manage the building for the first few years including development of SOPs, cleaning, keeping insurance in place, and building a community of residents. Eventually the equity of the entire project will be transferred to his customers in proportion of their apartment’s area. He plans to keep a few apartments for himself which he might rent out.
By 2018, he plans to start another project incorporating all the experience from this first one. He intends to continue this business, despite ‘the profit margin’ not high enough. “Obviously there are profits and that’s why people are coming in this business, but this is a very tricky business… I don’t have any high profit expectations from this project, I am here to learn. The business perspective is there but the learning curve is more important. If I learn something, I can create a niche and make more money.”
Spread over 12 kanals, Oyster Court Luxury Residences is an upmarket project by Keystone Properties – also known for their Heritage Luxury Suites. With two seven storey towers, offering one-bedroom (covered area 1,100 sq ft to 1,500 sq ft), two-bedroom (1,900 sq ft to 2,290 sq ft) and three-bedroom (3,200 sq ft) apartments at an approximate price of Rs17, Rs29.5 and Rs 48.6 million respectively.
As per the Oyster Court website there five one-bedroom, seven two-bedroom, and two three-bedroom apartments on each floor, totalling 98 apartments on ground plus six floors. Four elevators, swimming pool, spa and fitness gym in both towers, along with round-the-clock electricity backup, car parking and
firefighting equipment are among the facilities offered.
Keystone Properties shall manage the block for a decade at a monthly service fee. This management tenure is subject to negotiation and can last longer than a decade.
Oyster Court apartments come with the option of furnishings which include air conditioners, kitchen equipment, TVs, bed-sets and dining tables. The management is also willing to provide fully serviced apartments including housekeeping, deep cleaning, valet parking, laundry, Wifi, and newspaper services. Residents may opt to rent out, through Keystone at a management fee of five percent of the rental income – also open to negotiation between the owner and Keystone. Customers can choose a staggered payment plan spread over two years, or a down payment plan at a discount.
Oyster Court has brought on board Colliers International as its selling agent. The multinational company’s Pakistan division is finding customers for buying and renting apartments. Colliers has a multitude of impressive names on its clients list, including Avari Hotels, Pakistan Defence Officers Housing Authority, Design Developers, and Hydra Properties.
This may provide an edge to Oyster Courts over competition in finding international clients, since the market trend already reflects that a major proportion of customers buying these apartments are expats and overseas Pakistanis wishing to invest in Pakistan, also serving the dual purpose of a residential oasis on visits back home.
Considering the target market of investors, as opposed to luxury residence seekers, Oyster Courts has topped up their selling points with a promise of seven percent rental yield to their clients, if the customers
choose to rent out through the company. The Oyster Courts’ marketing approach – not just residential option, but short-term (rent) and long-term (capital appreciation of property) returns – might turn out to be the difference.
According to Colliers research – published on Oyster Court website – the potential of increased value appreciation and rental income has shown a positive trend since the turn of the decade, and is expected to keep an upward trajectory.
With hospitality projects like Holiday Inn Express and Hospitality Inn, the Maverick Group launched Hyde Park Serviced Residences in Dec 2015 – its first residential project in Pakistan covering a 10 kanal area with 54 apartments and four penthouses (eleven apartments on each floor up till fourth floor and five apartments and two penthouses on fifth and sixth floor, with covered area ranging from 2,550 sq. ft. to 3,874 sq. ft. at a price ranging between Rs15,500 to Rs21,000 per sq. ft).
The plan suggests no commercial activity, save a single for-residents-only shop, and it would be ready for possession by summer 2018.
Marketing Manager Usman Nawaz said, Hyde Park is the pioneer of luxury apartments in Lahore, though now half a dozen others are at or nearing completion, and a few dozens more in the pipeline. “No other project compares to Hyde Park as none is operating on such scale – size maximum four to five kanals while ours is on 10 kanals. Oyster Court might be larger, but it is not just the size of the plot but the quality of the location that matters”.
“Vertical living in Lahore in near future is inevitable. It is impossible to buy land for residential purposes in Gulberg, and far easier to buy an apartment with all the facilities in the block. People will prefer living in the busy and central location of Gulberg over quieter suburbs. “The cost of living in a house is much higher, and commute from far away is a major issue. Apartment covers a smaller area but at the same time the living standard rises.”
A unique Hyde Park feature is transferring land ownership to the apartment buyers. “They will not only own the apartment but according to its will also have a share in the land, which is more expensive than the construction. So it is a solid investment.”
Usman is not worried about the possibly prevalent sentiment in Lahore, preferring a house over the apartment. “People do compare both… but those opting for a house over an apartment are not our target market.”
“The CPEC has opened doors for the Chinese market. If you are moving to another country, you wish to stay in a safe place. Plus they appreciate the convenience.” He added that even locals are going for these apartments as it presents a good investment opportunity both in terms of rental income and capital appreciation.
While he advocates that Lahore is ready for vertical living, he insists: “If anyone makes 700 apartments in a building here like in Karachi, he would definitely be at a loss. Population of Lahore is not that high and combined with the local culture, such a project wouldn’t be successful. There is a reason why people will buy apartments and in a place less central that reason would be lost.
“Hyde Parks will have all facilities within the building – including swimming pool, gym, backup generator capacity, elevators and even trained staff to take care of management and services. The location is foremost, design and structure come second but are equally important. We could have made 25 more apartments even in this height but that will defeat the purpose of design and view we are providing to our clients,” said Usman.