In Pakistan, real estate has long been a dominant avenue of investment, despite a pattern of fraud and unreliable projects. The national economy reports that real estate activities account for roughly 5.8% of GDP, though this number excludes significant informal activity, which is hard to assess due to the lack of data. Historically, successive governments have introduced amnesty schemes to “whiten” money invested in real estate, further highlighting the sector’s informality.
However, even within the formal sector, problems abound. Issues such as delayed handovers, substandard developments, and a lack of accountability post-completion are common. These concerns are compounded by the absence of a dedicated real estate regulator, which means developers face minimal consequences for underperformance. The “build-and-forget” mentality prevails, and long-term property management and maintenance often take a backseat to immediate profit.
This issue is exacerbated by the sector’s reliance on speculative investment rather than rental yields, making developers more inclined to prioritize selling real estate units over investing in infrastructure that improves tenants’ experiences or reduces operational costs. Furthermore, once buildings are handed over to multiple owners or an ill-equipped management team, maintaining high standards becomes difficult.
The co-working industry has risen to address these pain points. Companies like Colabs, Daftarkhwan, and The Hive have brought a new model of property management to Pakistan. These businesses focus on thoughtful design and professional management, turning neglected spaces such as warehouses into co-working hubs. This approach benefits property owners by offering them access to professional management services without the need for in-house expertise, and tenants get well-maintained, functional spaces.
The success of the co-working model indicates a shift in Pakistan’s commercial real estate market. Rather than relying solely on regulatory reform, the sector could benefit from scaling these proven management approaches. By doing so, it could attract institutional capital and drive formalization through market incentives, creating natural pressure for better regulation and service delivery.
In conclusion, while challenges remain, the rise of professional property management and the co-working model may offer a promising path forward for Pakistan’s real estate sector. It demonstrates that market-driven solutions, which align incentives with improved service delivery, can play a pivotal role in transforming the industry.
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