M. Shafi Jakvani, learn about real estate from the real man of real estate

M. Shafi Jakvani, learn about real estate from the real man of real estate

Profile of Interviewee:

Muhammad Shafi Jakvani is the CEO of the Citi Associates- one of the largest real estate companies of the city. He has professional experience of twenty-three years and for the last sixteen years, he is heading his own company, Citi Associates. With an impressive educational background (Masters in Business Administration), his research work often publishes in leading newspapers and is also available viral, especially at his website www.dhatoday.com, a website having monthly traffic of more than 2.5 Lakhs visitors.

He is offering a focussed investment portfolio and opportunities in property to the investors, especially to few customers that are still with him, since the start of his real estate career.

Manager Regional Leads, Live Rostrum Farhan Khan conducted his exclusive interview,  especially for the people having interest in property business in Pakistan.

FK:  Kindly tell us about yourself and your company.

SJ:    I am in the field of real estate for last 23 years. I started my career as a surveyor, which is the starting job in this field. I established my first office in 1996 with the name of Mehdi Corporation, but due to some unfavorable situations, I decided to close it in the year 2000.

After two years, in 2002, we established Citi Associates in Karachi’s famous area of Zamzama. Later in 2005, we shifted our office to our present location at Glass Tower, Clifton.

In 2012, we launched our website www.dhatoday.com in order to move in the digital world and to provide the potential property buyer or seller of factual information, as there is a dearth of documented-material and research based work in this enterprise in Pakistan.

We write analysis and research based reports on property for customers’ guidance to be provided later on our website. Surprisingly, we have got an overwhelming response; monthly number of visitors to our website is above 2.5 Lakhs.

When Bahria Town came to Karachi, we launched our exclusive website for Bahria Town: www.bahriatowntoday.com.

You would not find any regulatory authority for the counselling of the customers and they totally depend on estate agents. A large number of real estate agents are uneducated and working by neglecting professional ethics. A new customer doesn’t have much information about them i.e. their background, professional experience etc. By the grace of Allah, thousands of people follow our portal, www.dhatoday.com, take advice and wait for our emails.

We compile data of around 48,000 email addresses and send the emails on weekly basis to the individuals, all over the world, having stake in property in Defence, Clifton, DHA City and Bahria Town. A large number of our customers are in Saudi Arab and Dubai.

In past, we had organized real estate exhibitions in Dubai and London for our regular buyers and sellers, who are dwelling in abroad.

FK: What are the requirements to open a real estate agency and to enter this field?

SJ: This is the setback and worst part of this industry as there are no regulations, requirements and criteria to enter this line of business. Without permission, licensing, experience, legal documentation and true information, you could enter in this field.

You just take a shop, put table and chair, place a board of real estate and open your estate agency. It happens quite often that customers stuck and lost their hard earned money by taking wrong decisions on the advices of such agents. In Pakistan, except for real estate, you need a license even to open a travel agency or a medical store.

SJ: Is there any government real estate platform, operating in the city?

There is no real estate platform on government level, but privately, we have two or three platforms which include DEFCLAREA (Defence and Clifton Association of Real Estate),  one of the largest associations of real estate, having membership of around 15, 00 real estate agencies. One other platform is REBIC (Real Estate Business & Investment Club), which offers membership to selected individuals, only.

Our ultimate goal is the formation of a real estate regulatory authority through government, either federal or provincial, for new comers in the field of real estate, which will fulfill requirement of  license to open a real estate agency.

FK:  What are the indicators of a real boom in property business?

SJ:    I have written a theory with the title, ‘Decade Cycle theory of Real Estate in Pakistan’, dealing with the market trends. In Defence, the work of real estate started in 1980; it’s a thirty-five years story, now.

Market has witnessed up, down and flat trends several times. In every 10 years, we witness that real estate market makes its top and then fall and then becomes flat and again makes its highest reach. It’s a technical study of market cycle.

In 2005, market formed its top, as there was boom in economic activities, but when the stock market crashed in the same year, DHA property market also crashed. In 2007-08, there was international economic recession and Dubai real market collapsed in 2008. Market remained flat from 2009 to 2011, but later in 2011, the market started to take-off. Market has been generally showing upward trend since 2011.

In November, DHA real estate market was at peak and in this condition, the speculators invested too much and caused the artificial increase in the prices. But, as it happens quite often in this situation, the market has undergone downturn.

At present, the market price of property in DHA phase VIII has lowered to 12 to 15 per cent, while the worth of property in DHA City has reduced significantly to 20 t0 25 per cent.

Within the span of the last five years, the market price have increased minimum four times to maximum ten folds.

Despite the reduction in the prices in these sites, the overall situation in the property world seems good on general basis in the coming years.

FK: What is the present status of property in Bahria Town Karachi?

SJ: Bahria Town is new for Karachiites. It had made hype in the city, due to aggressive marketing. Its slip of 15,000 rupees reached up to 200,000 rupees, as people showed their great interest in investing in this project. They also offered good returns, as well.

It is a psyche of a common man that if he gets good profit from somewhere, he doesn’t only get benefit from it, but, further invest its earnings in greed. Same happened in Bahria Town, they gave good return in 2014, but the investors, instead of getting benefits, further invested their profit money in the project.

Unfortunately, its market declined after reaching its maximum capacity. The investors have been severally encumbered since then, but in the last one and a half year, the project has shown significant physical development of infrastructure on site.

There are still lots of things go in negativity of the project, but I predict that 2016 will be positive year for them, as its buying is increasing while people are witnessing its development.

FK:  What is the role of banks in the field of real estate in Pakistan?   

SJ: Banks with real estate is not a success equation in the country, so far. Unfortunately, we have very high interest rates in commercial banks. Banks don’t give loans on open plots, as they are eligible to provide loans only on constructed property.

I don’t advise for bank’s loan to buy property in a country where rental rate is 3 to 4 per cent and bank’s interest rate is 14 per cent. It is more feasible to live on rent, instead of buying property through banks’s loan. Internationally, it is favorable to buy property by bank’s loan, as rental rates are 6 to 7 per cent, there, in comparison to just 3 per cent rate on property loan.

FK:  How you see the role of online websites and social media for buying and selling of property?

SJ: They are playing a good role. In Pakistan, we have got www.zameen.com, www.lamudi.com and our own www.dhatoday.com etc. in field of real estate. Interest of the customers have increased in buying, selling and getting information of the property by using digital tools of today’s world.

I had made several property deals through internet. We daily receive around hundred calls through digital market for buying and selling the property.

One could promote his s real estate business through social media. In the past, we had only two newspapers, DAWN and JANG, for our promotion and advertisement, but now we have several online options available for marketing plus making own websites and linking it with other internet portals which is easy and common these days.

FK: Anything you like to add to conclude this interview?

SJ:  There is a negative perception about the real estate business in our country. In any place where there is involvement of money, there is risk of cheating and malpractices. In real estate, people invest in millions and billions, have enormous volume.  If there is scam, fraud or cheating in this field, it would not be of just hundred rupees, but in Lakhs and millions. I advise people to do some research at their own, before making any deal in property and they should not merely relay on the estate agents.

Moreover, there are good options and opportunities in real estate. In past, investors required crore or two to invest in Defence, but now you could invest in DHA City and Bahria Town by just 10 LAKHS rupees.

In coming days, we are going to launch Real Estate Funds, especially for the overseas and common man who neither has time nor expertise in the field of real estate.

They could add their small share, 10 to 20 Lakhs rupees, in our large chunk of investment in the properties. They would receive their share in the company’s profit. Often people ask us for opening such setup, so they could benefit from our expertise and experience in the field of real estate.

This interview link has also been published on Top 10 Small Business Investment Opportunities in Pakistan

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4 years ago

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