ISLAMABAD – Islamabad’s prime real estate failed to impress investors as five hotel plots remained unsold despite attractive payment incentives. With CDA demanding Rs1.9 million per square yard, the auction fell flat, while a separate auction for seven petrol pump sites was also called off or postponed.
The hotel plots were offered at the Jinnah Convention Centre earlier this week, but failed to attract sufficient investor interest. The disappointing outcome was followed by the withdrawal of the petrol pump auction scheduled for Tuesday, October 13.
The weak response has raised questions about the CDA’s pricing strategy, as investors reportedly considered the reserve prices for the hotel properties too high to make the projects commercially attractive.
Rs1.9 Million Per Square Yard Price
CDA fixed the reserve price for the hotel plots at Rs1.9 million per square yard. However, prospective investors reportedly argued that a rate of around Rs1.3 million per square yard would be more reasonable for the projects.
Only around five parties reportedly registered or participated in the auction, while the bidding process failed to generate sufficient competition to complete any sale.
Accounts of the auction differed over the exact level of participation. Some reports indicated that a few participants purchased tokens but did not submit bids, while another account said a single offer exceeded the reserve price by just Rs5,000. The CDA reportedly rejected that bid over a lack of competitive participation.
All five hotel plots consequently remained unsold, despite the authority offering properties in some of Islamabad’s most prominent commercial and hospitality locations.
Five Prime Hotel Sites
- Plot No. 22, D-12 Markaz: Approximately 5,274 square yards.
- Convention Centre Hotel Plot No. 6, F-5/1: Around 21,777 square yards, equivalent to approximately 4.51 acres, near the PNCA and Marriott Hotel area.
- Five-Star Hotel Plot No. 8, F-5/1: Approximately 18,055 square yards, or 3.73 acres, behind the Marriott Hotel.
- Hotel plot in E-11 Northern Strip: Approximately 13,169 square yards.
- Hotel/motel site along Srinagar Highway: Around 2,444 square yards, or four kanals, between the Sports Complex and Margalla Hotel.
Srinagar Highway property carries an additional regulatory hurdle, as it falls within Zone III, where construction is heavily restricted and special federal government approval is required. Several of the sites are located near government offices, the Diplomatic Enclave and major tourist destinations.
CDA has reportedly attempted to auction some of these properties, particularly the two F-5/1 plots, in the past without securing successful buyers.
The authority had announced multiple incentives in an effort to attract bidders, including payment flexibility and discounts for early settlement. Under the announced terms, successful buyers could pay the purchase price over a period of up to one year. Building plan approval was linked to payment of 25% of the total amount, while possession could be granted after payment of 75%, subject to a bank guarantee for the outstanding balance.
Investors making full payment within 30 days were eligible for a 5% discount. An additional 5% concession was offered for payments in US dollars, including transactions through Roshan Digital Accounts for overseas investors.
Despite these incentives, the auction failed to produce a successful sale, with the reserve price emerging as a major concern among prospective investors. CDA maintained that the exercise was part of its routine auction process and was not directly linked to preparations for upcoming international events.
Islamabad faces a continuing need for quality hotel accommodation ahead of major international gatherings and sporting events, including the SCO conference and the South Asian Games.
Petrol Pump Sites Face Delay
The setback extended to a separate auction involving seven petrol pump sites, which had been scheduled for October 13 at the Jinnah Convention Centre.
CDA cancelled, called off or postponed the exercise after the unsuccessful hotel auction, according to reports. The precise administrative reason for the decision was not independently established.
The petrol pump sites were to be offered as a single package on a 20-year lease or rental basis, rather than through an outright sale of the land. Participation was restricted to registered oil marketing companies (OMCs), with some notices also referring to authorised dealers.
The proposed package included:
- Two sites on Murree Road near Lake View Park: Approximately 3,555.55 square yards each.
- Blue Area, F-10: A 2,500-square-yard site.
- I-12 Markaz: Approximately 3,688.88 square yards.
- Plot No. 15-B, G-8 Markaz: A 1,200-square-yard site.
- Plot No. 13-A, Mauve Area, G-8/1: Approximately 2,555.55 square yards.
- Plot No. 26, Mauve Area, G-11/1: Around 2,000 square yards.
Under original petrol pump auction conditions, interested companies were required to deposit Rs25 million as token money. Some secondary reports cited Rs250 million, or Rs25 crore, but the stated amount in the relevant conditions was Rs25 million.
The monthly rent was to be determined through open bidding and paid in advance, with a 10% annual escalation. Successful bidders would have been responsible for all construction work, utility connections, regulatory approvals, licences, taxes and other development-related expenses.
The construction deadline was generally set at a maximum of five months in official notices, although one secondary report mentioned a period of up to nine months.
The initiative was presented under the CDA’s “Clean Energy | A Greener Islamabad” vision, allowing complementary facilities alongside the petrol pumps.
CDA generates over Rs16 billion from commercial property auction