x Abu Dhabi, UAESaturday 22 July 2017

'No man's land' is estate agents' gold

Speculators are set to make a killing by buying up real estate along Pakistan's border with India.

A billboard advertises a housing project on the Indian border near Lahore.
A billboard advertises a housing project on the Indian border near Lahore.

LAHORE // Speculators are set to make a killing by buying up real estate along the border with India, after post-Mumbai fears of conflict sent prices plunging in the former war zone, investigation by The National revealed. Activity is focused upon a 10km corridor of agricultural land along the Burki Road between the army cantonment on the eastern edge of Lahore and the closed Gavindi-Thekla border crossing. Estate agents said prices had slumped to 400,000 rupees (Dh18,400) per acre from around 700,000 rupees before the November attacks as diplomatic tensions with India peaked in the New Year. Prices in the area had held steady since late 2005, having risen since 2001 when the Defence Housing Authority Lahore (DHAL), an army-owned commercial realty developer, began acquiring entire villages, starting with Hira Singhwala, on the western bank of the BRB canal, 10km from the border. Development had previously been barred because the area saw fierce fighting during a 1965 war, when Indian forces advanced undetected to the edge of Lahore before being forced back and held at the canal. Real estate transactions in the area are still subject to security clearance from the Pakistan Rangers, an army-commanded paramilitary border force, while construction is limited to single-storey buildings unless approved by the office of the Lahore corps commander. Village residents said the recent diplomatic tensions did not coincide with a build-up of forces or tensions in the area, which falls between the public border crossing to the north at Wagah, on the road from Lahore to Amritsar in India, and the Ganda Singhwala post to the south, used by lorries plying commercial trade between Lahore and Firozpur across the border. The only casualties were three Pakistani smugglers, shot dead by Rangers as they crossed the no-man's-land from the border fence carrying boxes of Indian liquor. Pakistani law prohibits the consumption of alcoholic beverages by Muslims, who buy from bootleggers at greatly inflated prices. The easing of bilateral tensions, after intense western diplomacy, has revived investor interest with purchases including a five-acre acquisition by a daughter of Tauqir Zia - a retired army general who had supported the 1999 military coup d'état led by Pervez Musharraf. The transaction, reported to be at 1.3 million rupees per acre, is one of several recent purchases along the eastern bank of the BRB canal, justifiable under defence regulations as "farm houses". Such properties, predominantly owned by the families of retired senior army personnel, abound in a swathe of land sweeping south from the Burki Road to the parallel Bedian Road. The suburbs are being developed as Pakistan's most luxurious gated community and have attracted international developers from Malaysia and the UAE. There is great expectation that DHAL or private developers with military patronage will eventually expand past the BRB canal and spark a price escalation. Prices in Hira Singhwala had started at 250,000 rupees per acre in 1998, immediately before the realty rush. As news of DHAL's plans to buy villages spread, prices climbed to 600,000 rupees per acre in 2001. In the end, the authority bought at 1.7m rupees per acre, with land in some villages targeted for later phases of development soaring to 6m rupees per acre in 2003. Villagers compensated with documents giving them ownership of land within the planned residential development, based on a formula of one 500-square-yard residential plot and one 125-square-yard commercial plot per acre sold. The border ward expansion rang alarm bells among the army officer cadre, with one former provincial director of the Inter-Services Intelligence (ISI) directorate raising national security concerns in a letter to Mr Musharraf, who later conveyed his personal doubts to the Lahore corps commander, Gen Zarar Ahmed. His letter proved prophetic, if for unforeseen reasons. The lack of a tangible location for those plots meant they had no asset-based value before the allocation of physical addresses. Instead, the plots' "files" were traded like real estate futures in an open-air daily evening auction in a car park behind the DHAL head office. Prices for some files climbed beyond 10 million rupees for 500 yards in 2005, but it soon transpired that corrupt officials had flooded the market with fakes that had sucked in an estimated 15 billion rupees of investor money. Gen Ahmed ordered the detention of the colonel in charge of land transfers and the brigadier serving as vice chairman to the DHAL corps commander was questioned by ISI. Both officers were forcibly retired. The controversy was kept from public view because of a press ban, but surfaced in a 2007 book, Military Inc: Inside Pakistan's Military Economy, by Ayesha Siddiqa, an independent military analyst. The book's wider revelations prompted a short-lived ban on its retail distribution, while the author temporarily fled to the United Kingdom after receiving anonymous threats. DHAL remains the community of choice for Pakistan's social climbers and continues to act as a quality and pricing benchmark because, as one estate agent said: "It's where the generals invest." Nonetheless, those investments are haunted by the protagonist past of the South Asian neighbours, which last saw forces go eyeball-to-eyeball on the Lahore border in 2002. Locals recall how, one night, a passing army colonel walked into a farmstead to advise the gathered councillors to extinguish external lighting visible from the border fence. The pre-emptive advice was taken as a warning that war had broken out. "The councillors started smashing lights with their shoes and local police fled their station," laughed a local politician, who requested anonymity. thussain@thenational.ae