Lamudi Pakistan explores the implications of Pakistan
International Airlines’ privatisation
According to predictions made by Lamudi, a leading online
property portal in Pakistan, the upcoming privatisation of Pakistan
International Airlines (PIA) will likely increase the value of real estate in
major Pakistani cities, including Karachi, Islamabad, Lahore and Multan.
With privatisation, it is expected that the airline will become
more efficient and profitable and will provide better service to passengers and
local businesses. This means that air connectivity, a key element of an
improving economy, will improve greatly in the nation’s biggest cities.
PIA’s Troubling Background
Pakistan’s national airline has been under severe financial duress
since at least 2014. In 2015, their losses climbed to more than Rs. 27 billion.
In an effort to stop the bleeding, the government is planning on
partitioning PIA and selling it off in parts.
The idea has been on the table since the 1990s, but is only now
approaching realisation.
The Real Estate Connection
It is no mystery that noise created by airports actually
contributes to a decrease in property values for residential real estate.
Nobody likes noise overhead.
However, reports have shown that airport proximity
can contribute to increases in commercial property values and the profitability
of area businesses. Some studies have shown that it can also
contribute to increases in residential real estate values, turning conventional
wisdom on its head.
Furthermore, air connectivity is growing as an index
factor in judging the socio-economic momentum of cities around the world.
And it’s no different in Pakistan.
Total passenger movements
Airfares
Number of direct destinations
Travel time
With privatisation of the PIA, these metrics, and thus air
connectivity, are being predicted to improve drastically.
This means real estate, both residential and commercial, should
feel positive effects shortly after privatisation is completed.
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