Arif Habib to pump in additional Rs750 million into Naya Nazimabad

Construction to continue apace even as existing residents faced flooding damage owing to poor urban planning and design

The original Nazimabad, named after the first Governor General Khawaja Nazimuddin, was a middle class suburban neighbourhood in Karachi, established in 1952. North Nazimabad, was designed for federal employees. As they housed mostly refugees and immigrants from India, these neighbourhoods came to embody the promise of ‘Pakistan’ – prosperity for the middle class. To this day, they command some of the highest per-square-foot prices in Pakistani real estate.

‘Naya Nazimabad’, the Arif Habib Group project, has been trying to galvanise a similar sentiment for the new middle class of Karachi, which may have been somewhat dampened (pardon the pun) by the recent flooding that took place in Naya Nazimabad following the torrential downpour in the city. Mahim Maher, a journalist with considerable expertise on Karachi, reported that part of the reason for the flooding was the poor urban planning on the part of the contractors hired by the Arif Habib Group.

Nonetheless, despite that setback – and despite its refusal to compensate current homeowners in Naya Nazimabad for their flood damage – Arif Habib is moving ahead with its plans for the development. In a notice sent by the Arif Habib Ltd to the Pakistan Stock Exchange (PSX) on August 28, at the next annual general meeting to be held on September 16, the company  is looking to approve some serious investment for other companies within the Arif Habib Group. In particular, Javedan Corporation, which owns Naya Nazimabad, is asking for fresh investment of Rs250 million in equity, and Rs500 million as a loan.

So, what is Naya Nazimabad going to do with Rs750 million?

It helps to back track a bit. First, let us look at the Arif Habib Group. The group started  in 1970 with the brokerage firm Arif Habib Securities. This evolved over the years to the conglomerate of today, and its flagship company is Arif Habib Corporation. However, the investment banking and brokerage arms have been managed by Arif Habib Ltd since 2005. 

Now, Arif Habib group also owns majority shares in Javedan Corporation, which was incorporated in 1961 and started off as a cement factory. Javedan owns around 1,300 acres of land at Manghopir, near SITE in Karachi. The area used to house Javedan’s cement plant, dilapidated by years of neglect, which in the last decade has now been converted to a housing project. The project is connected to the city via Rashid Minhas Road and is close to Nazimabad, North Nazimabad and North Karachi.

As a project, Naya Nazimabad was conceived to “accommodate the housing demand of the middle income group and to provide a quality lifestyle for the progressive middle class,” according to its website. The land is divided up into eight blocks (A, B, C, D, K, L, M, N), with each block designed to have its own commercial area, mosque, and park. The houses are divided up into 120, 160, 240 and 400 square yards residential plots. Once fully made, the project will have up to 30,000 homes, accommodating a population of over 100,000 people.

So, where does Naya Nazimabad stand as of now? According to Javedan’s annual report of 2019, the company delivered around 4,000 units of developed plots and bungalows. The infrastructure development work for blocks A, B, C and D have been completed, while development in block M is still ongoing. Portions of block K and L were also open for sale. More than 400 families were settled in Naya Nazimabad in 2019, while the total number of residents reached around 500. The company also negotiated agreements with utility providers K-Electric and Sui Southern Gas Company. 

During the financial year, the company recorded a sale of Rs1,899.02 million, which was lower than 2018’s Rs2,479.16 million. Meanwhile, the company’s profit after tax was recorded at Rs579.8 million, compared to Rs703.71 million. Historically speaking, these numbers are quite good: the company recorded a consistent loss between 2009 to 2012, the last few years it was still a cement factory, before recording a profit every year since then (after having converted to a real estate developer), hovering around the Rs800 million mark. In 2017, it recorded its highest profit, at Rs990 million.

The timing of this equity injection could not come at a better time. Naya Nazimabad has several construction projects up its sleeve. These range from a giant flyover to connect Naya Nazimbad with Karachi, which bypasses the Nusrat Bhutto colony to the Naya Nazimabad Gymkhana. 

But the company also wants to start constructing apartment blocks in the project, and a commercial arcade. “The development and sale of apartments shall be a driving force for the Company in the short to medium term,” noted the director’s report. In the financial report from March 2020, the company noted that the “planning for the launch is almost complete. However, the timing of launch will need to be tactfully assessed due to the prevailing overall economic environment.” It did note, positively, that there was increased habitation at the scheme, which was appreciating the value of the houses. 

The company is helped by the recent government boost to the construction sector. Ever since the federal government announced an incentive package for the real estate and construction industry in April 2020, it has become incredibly lucrative to enter the real estate market, especially the affordable housing segment. The industry will also have a fixed tax regime – more akin to a sales tax – instead of taxes on profits.  Additionally, the central bank has asked commercial banks to allocate 5% of their total lending to the construction sector. This will hopefully improve lending in general: as is, banks’ current exposure to the sector is only at 1% of overall loans.

Javedan was cautiously optimistic  about the construction package, noting in March that “the construction package by the Federal Government will need to be backed up by necessary changes required at Provincial level in respect of approval mechanism and provincial level taxes, duties and related matters.”

Still, Arif Habib Ltd has certainly noticed. It is why along with the Rs750 million for Javedan, the company is also proposing fresh investment of Rs200 million in Aisha Steel Mills, Rs200 million for Power Cement Ltd., and requested a renewal of Rs406 million for Safemix Concrete Products. Expect more buildings from Arif Habib in the future.

Just do not ask about the flooding the next time it rains.

19 COMMENTS

  1. A planted story by the Arif Habib group. After recent debacle due to the rains exposing poor planning and inhuman treatment by the management to the effected residents resulting in sudden fall of prices and demand only a fool would invest to purchase any housing unit in the project.

  2. At this point of time when Naya Nazimabad has been severely flooded and its residents faced loss of their valuables etc, the story (which seems one sided to be honest) should have focused on what has been done and what will be done to avoid this in the future. As the story noted there are only 500 residents in the vicinity, surely they could have been compensated to make good their losses. This would have put the Javedan corporation in a positive light and also have boosted investor’s confidence, but alas..

  3. Totally agree with yasir, they should focus on the restoration work and residents rehabilitation as residents are suffering badly. At the same time, government is seen no where in this time of catastrophe, even the PM didn’t bothered to give a visit to the site and residents problem. Where is tabdeeli???

  4. Yes this is time to respond the real estate company for rebuild the construction strategy that would not to be constructed as this property are being developed in dispit of the effected residents they are effected over all issues up from this weak construction planning and whoever this Naya nazimab has been flooding this look like a senerio of saw side part seems everyone could go on flooding as much as possible the construction is good as well as they seems pretty on planning but it doesn’t have rain forcatsting strategy if I would be flooinding over all the city so how the process of drained could do the work at all.
    So if residents would face next rain and so on so . Who will asking about it the rain is not be stop for several of weeks then what is in planning to process to water draining because the global warming is up coming as well as natural disasters are being developed as we have seen already to over all the world.
    Why our builders are not aware for all these issues they got get in mind when they build a new city like Naya nazimab .
    As we know our builders developers have famous engineers and planner’s as well as architecture along with coprativ government
    Then why they not doing standard
    Work out as up to date strategy where all infrastructure is supposed to succeed and we’ll procced .
    Often we are living in dream that rain and natural disasters could not to come in cities .
    My all lines of writing is useless if not to getting notice by respective prospect builders and devolpers are not going to notice certainly serious.

    Regards and thanks

  5. There seems to be a lot of reconstruction activity going there I visited a few days back, a lot of the affected residents have been accommodated in the model houses, constructed and not yet sold houses, in the hospital block and other areas of available space.
    There were several pumps operating in the flooded area and it seemed like they were working hard on trying to drain out the water into the area nallah.
    I spoke to some residents and apparently the boundary wall was broken by people living in the surrounding area and all the water of the whole Mangopir had gone into the housing scheme.
    Management have been working day and night trying to drain out the area.
    Other than the flooded area the rest was dry and seemed really pretty. There’s a beautiful huge mosque I saw just as I entered the gate.

  6. Well I believe there are people who are trying to defame the society and they must have been bribed to do so by someone stronger mafia. Is this is the only society which is flooded. If this is the worst what about surjani, north nazimabad, dha and bahria 🙄. Why people aren’t talking about those places DHUAAN WAHI SE UTH TA HAI JAHAN AAG HOTI HAI.
    koi to baat hai naya nazimabad me ko Sab discus kar rahay hen.

    • Idiot, we are talking about dranage and sewarage system which Naya Nazimabad did not place in that society. We are not talking about the flooded problem.

      We are living here and we know what happened with us.
      The NN management are thief’s and Arif Habib is a mafia.

  7. Yes. This is the time where JCL & Naya Nazimabad stand up with the public and support for the affected people. As many of them is completely submerged in current flooded condition. Comes due to bad planing and no proper dranage system of Naya Nazimabad team.

  8. What about those poor people who living in Naya Nazimabad, and they lost everything in recent rains…and peoples are out of their homes and living under the open sky… Till to today the water not yet drained…. What kind of big group is this? Management is sleeping and water drainage in process with straws….Please stop this Drama… Help the people who lost their property…

  9. I visited NN on 4th September and found the condition pathitic. The water was still their up to horse Chorangi. The NN Management completely failed to remove the water they were using pumps which was a foolish idea to drain so much water. The standing water for over 20 days should had completely ruined the house. They are dangerous for further living.
    Inspite of pumping, the NN Management should had digged a space on dry area very much deep and made as many ways as possible to flow the water towards it by gravity making it a lake.
    In only 24 hours the complete area became cleared and the houses remained out of danger.

  10. Accually that is the place mango phir leak so water is being charged through under ground of leak down plate of earh .as we know sea and leaks are nturaly buildups. We can’t stop to grow them if they started to grow up and now suation is look like this more over the possibility of this the leak is now alive to grow up day by day.

  11. In early season of rain, there was heavy rain and drainage worked well except few street of Block B. In this time, when wall broke to drain water into NN so much water came into NN. This water suppose to exit by NN drainage system as water is more so we can expect it will be out within 1 or maximum 2 days. I think something wrong happened in their drainage as I am hearing they found many things insider drainage to block. This is something NN management is showing to media in order to gain confidence of residents and also they must give some compensation to the residents

LEAVE A REPLY

Please enter your comment!
Please enter your name here

95,620FansLike
12,824FollowersFollow
854SubscribersSubscribe

Textile sector production revs up as virus spread decelerates

The country's textile sector has dramatically increased its scale of production, restoring it to pre-corona levels of maximum capacity as the containment of coronavirus...

Tender for construction of important M-8 section issued

LAHORE: China–Pakistan Economic Corridor (CPEC) Chairman Authority Asim Saleem Bajwa on Sunday announced that the tender for the construction of an important section of...

India passes farm bills amid protest from opposition parties

NEW DELHI: India’s parliament on Sunday passed new bills the government says will make it easier for farmers to sell their produce directly to...

Iran’s rial hits record low as tension spikes with the US

DUBAI:  The Iranian rial fell to a record low against the US dollar on the unofficial market on Sunday, a day after the US...

Unlicensed money changers go off radar as AML bill passed

Unlicensed money changers have vanished from markets as the Senate and National Assembly (NA) passed an anti-money laundering (AML) legislation, which was a key...

Rolls-Royce plans to raise up to 2.5 billion stg as Covid-19 bites

LONDON: Britain's Rolls-Royce Holdings Plc said on Saturday it was looking to raise up to 2.5 billion pounds ($3.2 billion) in an effort to strengthen...