Ferozepur City – brimming with potential or problems?

Ferozepur City, a project located next to Central Park on Ferozepur Road, has been the subject of much controversy of late. A lot of people have been wondering whether or not the project is safe for investment – and I’m here to give you all the detail you need.

What’s cooking here?

Among the issues that haunt the project at the moment, the major one is the absence of a no objection certificate (NOC) from the Lahore Development Authority. According to some of my sources, investigations at a higher level are also being carried out against Ferozepur City’s management. Reportedly, the society has only paid the token money against the land it plans to buy, while plots have already reached the secondary market.

In the real estate sector, the practice of selling plots without acquiring land for them is nothing new. In the past, this practice has turned into a huge issue for property owners that have put their money into the project – be it as an investor or a genuine homebuyer. Bahria Town Sector F and DHA Valley, Islamabad, are both examples.

Around 2,500 acres of land has been cleared up for Ferozepur City. The project is expected to see a launch some time by the end of this month. Many property agents – many of whom deal in the project – claim that the society will get an NOC from the Lahore Development Authority (LDA) before the launch.

A marketing gimmick?

The society only has 2,500 acres of land but the marketing campaign for the project appears quite extravagant. For instance, check out the following features they promise to offer in their project:

·         The project is slated to feature Pakistan’s largest masjid, which will span a 25 acres area

·         A Joyland, spread across 23 acres

·         A 200-kanal park on the main boulevard

·         A museum dedicated to Baba Bhullay Shah, featuring his Sufi philosophy

·         A 40-kanal park in all blocks

·         Possession for commercial plots to be offered in one month and that for 2,000 residential plots in six months

·         2,000 houses will be built for poor families

·         Educational institutes

·         Sports complex

·         Zoo

·         Underground electrification that provides an uninterrupted supply

·         Cinema

And a lot more. Whether or not the society is able to actually provide all of these facilities remains to be seen. If they do manage to build a society that has all of this, it will be an excellent investment. However, 2,500 acres does not seem like enough land to accomplish all of this. So, we need to wait and see how the developer plans to execute all of this.

The fault in their dealings

Ferozepur City is not directly involved in selling plot forms to anyone. Instead, it relies on a group of registered dealers who conduct the transactions through their own channels. The society oddly stays out of the entire process.

Through this agreement, the agent is bound to return the entire amount paid if things go south. However, if it brings a profit, then 50% of the amount is to be shared between the dealer and property owner. I have never encountered this practice before.

The booking price for a 5-marla plot form is PKR 100,000 while the market price of this will be PKR 2,095,000 when launched. The 10-marla plot is expected to be launched at a price of PKR 3,695,000 while current booking price for its form is PKR 150,000. Similarly, the form 1-kanal plot has a booking rate of PKR 200,000 while the market rate after its official launch is expected to be PKR 6,995,000.

Investors are currently only interested in forms for the 5-marla commercial plots. These plots will be valued at PKR 15,000,000. The forms are being sold at their down payment rate, which is PKR 1,995,000 with an asking profit of PKR 1,500,000.

What should you do now?

For people who are still unsure of how to proceed, waiting a month is a good idea. By the end of April, either the society’s claim that they are getting their NOC will turn out to be true, or it will be proved false.