ISLAMABAD: On the first day of the auction of commercial plots, Capital Development Authority (CDA) on Monday auctioned five plots worth around Rs5 billion, as investors remained uninterested on the opening day.
Normally, the CDA receives major bids on the opening day of the auction, as in the last auction held in January this year, the civic agency auctioned eight plots worth a whopping Rs22 billion.
During background discussion with officials and developers, it emerged that timing of the auction is not ideal because of poor economic condition of the country and political uncertainty. “On opening day of auction, the response of investors was not good. I do not know what the outcome will be in the next two days. Actually, the timing of this auction is not ideal. Let’s hope for the best,” said chairman of Islamabad Developer Association Chaudhry Naseer Ahmed.
He said that because of economic condition and massive increase in construction material in the country, the investors and developers are already in stress. “I want to request the federal government, which is very cognisant of the issues of developers, to provide relief package for construction industry in this budget,” he said.
Officials, developers say timing not ideal due to economic crisis
The CDA, which is expecting to fetch Rs20 billion in a three-day auction, is still happy over the response of investors on the first day.
“First day of the auction was attended by a large number of investors, and great competition was seen. Five commercial plots were auctioned at Rs4.7 billion on the first day,” says a press release.
It said that open auction of plots will continue on May 30 and 31, 2023 at Jinnah Convention Centre in Islamabad. The press release said that a plot measuring 700 square yards of F-7 Markaz was auctioned at Rs1.7 billion. Similarly, a plot measuring 711.11 square yards of D-12 Markaz was auctioned at Rs898,843,040. Similarly, a plot measuring 177.7 square yards located in G-10 Markaz was auctioned at Rs273,588,030 and another plot measuring 666.6 square yards of I-8 Markaz was auctioned at Rs1 billion and 3 crore rupees. Moreover, a petrol pump plot in G-9/2 measuring 1227.76 square yards was auctioned Rs848,389,070.
It is relevant to note here that the CDA, just after a gap of five months is conducting the said auction as in January this year, it had auctioned plots worth Rs41 billion (initially) and later on, that auction was matured at Rs30 billion as some investors surrendered their bids.
Some officials said that instead of after five months, this auction should have be held in the end of this year to get a good response. “We are still optimistic that in the next two days, we will fetch a handsome revenue as major plots will be put on auction on Tuesday,” said a member of the auction committee. He said that last auction of January was held after a year and a half, which is why, there was a huge response of investors. “Frankly speaking, it will be too early to comment on this auction as two days are still left and we have good plots in ideal places,” he said.
The CDA, which is an autonomous body, generates its funds itself and it has been mostly relying on its land bank for decades. Since, it has no serious resource generating options, it depends on revenue from auctions of plots to run its development and non development expenditure.
Published in Dawn, May 30th, 2023