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.

Air connectivity can be measured by a number of metrics, including:

 

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.