The digital road to property ownership in Pakistan

Two journeys that converge on one broken market

The episode opens with Muzamil noting, with some good humour, that this is actually the second attempt at recording — the Pakistani government had cut the electricity during the first session and corrupted the file. Jawad Nayyar and Abdullah Khan of DAO PropTech were kind enough to return.

Jawad grew up in Islamabad, completed his A-levels at BM&I, then read philosophy, politics and economics at Warwick, graduating in 2009. He came straight back to Pakistan, spent a couple of years in healthcare, then moved into construction — restaurants and cafes at first, then large government and semi-government contracts including a USAID-funded Centre for Advanced Studies and Energy at NAST, hostel and library buildings, and infrastructure projects with the air force. Alongside that, from 2014 onward, he was consulting on blockchain and cryptocurrencies with a close friend, Hamzah Kazi, until the government placed the sector in a grey area around 2017.

Abdullah’s path was different. He grew up in Abbottabad, moved to Islamabad at sixteen to do his A-levels — living alone from that age — and met Jawad at BM&I. He completed a BBA in finance and investments at NAST, then spent five years in international development with the German development agency, followed by a year and a half with UNHCR working primarily in Balochistan. “I’ve seen the overwhelming majority of Balochistan on road,” he told Muzamil. “It’s a very different economy — quite a few smuggling-dependent economies.” After grad school in the United States, where he studied public policy and data analytics, he joined Careem in Islamabad in 2018, handling operations. He left just as the Uber acquisition was announced — “a beneficiary,” he said, with a laugh about student loans. He then spent three years with a San Francisco-based data science company whose COVID-tracking software was adopted by the Sindh government. He moved full-time to DAO PropTech as Chief Product Officer after that.

Why real estate and blockchain belong together

Muzamil pressed Jawad on the intellectual origin of DAO PropTech. Jawad’s answer was a first-principles argument about money itself. “I believe every form of value exchange or value transfer should be backed by assets,” he said. Current monetary systems, he argued, have drifted far from asset backing — gold gave way to government credit, and now the distinction between collateralized and uncollateralized money is increasingly grey. For an asset-backed system to work, the underlying asset industry has to be clean. “We cannot expect an asset industry to be fraudulent, full of scams, full of valuation asymmetry and opaque information — and if that’s the case, the industry would be what it is.”

The first note Jawad wrote about the idea, around 2018, used the word “DAO” — Decentralized Autonomous Organization — at least twenty times. That note became the foundation. The company was formally incorporated in 2020.

Abdullah drew the analogy to Careem: just as Careem intersected GPS, smartphones, and digital payments to connect drivers and riders, DAO PropTech intersects blockchain, real estate data, and a digital marketplace to connect developers and investors. “Cryptos were definitely the first big use case of blockchain,” Jawad said, “but there is a whole new industry opening up with blockchain, and we are working on the real estate parameter of that.”

The SECP collision and what it actually meant

Muzamil gave a direct disclaimer before raising this: the podcast is not sponsored, and legal due diligence is the responsibility of the listener. He then asked about a December 2021 SECP public advisory that listed DAO PropTech among companies warned for allegedly offering fraudulent fractionalization schemes.

Abdullah explained the sequence. The company received no prior notice — the press release was their first interaction with the regulator. They assembled their team, engaged with the SECP over the following six weeks, and clarified that their value proposition was not fractionalization of a built-up asset but rather a technology platform connecting developers and investors. “We handed them our original bank statements to prove we are not collecting any money,” Abdullah said.

Jawad added the conceptual distinction. Fractionalization, properly defined, means buying a completed asset together and sharing its rental income or capital gain. Development, by contrast, has always sold fractions — they are simply called installments. “The first fraction you pay to buy your new asset is called the down payment. All the remaining fractions are called installments.” Every off-plan project in Pakistan is already selling fractions in this sense. The SECP, he argued, did not have jurisdiction over DAO as a technology platform, and no legal notice was ever issued. The outcome of the engagement is that the SECP is now working toward a new licensing category for fractionalization, and DAO will apply once that regulation is published.

Five ways to value a property — and why Pakistanis use none of them

The conversation shifted to the core problem DAO is trying to solve: asymmetry of information. Muzamil described his own experience of being quoted 56 lakhs for a property, being told it would sell for 75 in nine months, and then finding the same asset quoted at 48 lakhs elsewhere. “All this asymmetry of information gives a doubt to the value of the property.”

Jawad walked through five valuation methods that exist globally but are almost never applied in Pakistan.

The comparative method requires at least thirty similar properties to establish a statistically valid average price with variance. Most Pakistani buyers ask one or two dealers and stop there.

The investment growth method uses historical data. Jawad cited forty years of Pakistani numbers: average inflation of 7.5%, average GDP growth of roughly 3.8%, giving a property growth rate of around 12% compounded annually, with a variance of 3.5% — meaning 95% of properties grow between 8% and 15.5% per year.

The income capitalization method is, in his view, the most important. A property is worth what its rental income, capitalized at the going yield rate, implies. For a house renting at 50,000 rupees per month — 600,000 per year — at a residential yield of 3%, the implied value is 18 to 21 million rupees. Yield rates vary: 3–3.5% in developing Islamabad suburbs, 4% in newer areas, 5–6% in commercial. In central F-6, Islamabad, the yield drops below 2%, meaning the asset trades more like a collectible than an income-producing investment.

The replacement cost method — the most conservative — asks: what would it cost today to replace this property, including land, construction, and cost of equity? This is the method DAO uses for its own valuations, and it typically comes in 30–40% below prevailing market prices.

A fifth method, discounted cash flow, was mentioned but not elaborated on given time constraints.

The live exercise: pricing a DHA-5 apartment complex

Muzamil proposed a real-numbers exercise: a one-acre plot in DHA-5 Islamabad, a five-plus-one-storey residential building, 125 two-bedroom apartments of 1,600 square feet each.

Jawad worked through it on the spot. Land in DHA-5 at roughly 100,000 rupees per square yard on the higher side: 40 crore rupees for the plot. Total covered area of 200,000 square feet means a land contribution of 2,000 rupees per square foot. A-class construction at 4,000 rupees per square foot. Total cost base: 6,000 rupees per square foot. Add 10% developer premium and 12% overheads: approximately 7,300–7,400 rupees per square foot.

With a three-year build timeline and a 17% cost-of-equity assumption, the starting price for early investors would be around 5,000 rupees per square foot — roughly 80 lakhs for a 1,600-square-foot flat — rising through milestones to around 10,000 rupees at completion. At a 12% annual market growth rate, the market price of a comparable unit would be around 12,600 rupees per square foot by the end of the project. “Not only will our conservative pricing give you a return if you invest early,” Jawad said, “but on top of that there will be a chunk of market return as well.”

How the ledger protects investors when developers go wrong

Muzamil raised the obvious objection: what stops a developer from taking the money and disappearing? Jawad’s answer had two structural components.

First, the land is not held by an individual. It is parked in a Special Purpose Vehicle — a separate legal entity — which issues all contracts. Every investor’s contract flows through the SPV, so the land is collateralized against every rupee raised. If a developer absconds with one tranche of financing, the land and all work completed on it remain inside the SPV, available to cover other investors. “You will lose time while liquidation happens, but your money is still secure because it is still in an asset — on a very transparent ledger.”

Second, every transaction, whether it happens through DAO’s digital channel or off it, must be recorded on the ledger. DAO charges a small transaction fee for this but keeps it low to encourage compliance. “If you have paid money and your transaction is not on that ledger, you can call our helpline and get a dispute registered,” Jawad said. “We take responsibility for the integrity of that ledger.”

Smart contracts lock the area available for sale to only what is needed to fund the next three months of construction. Money is not raised ahead of need, which prevents the common developer practice of cross-funding one project with another’s cash — a practice Jawad’s father, a developer with thirty-five years of experience, identified as one of the industry’s most destructive habits.

Entry points, flexible payments, and who this is actually for

By the end of the conversation, the discussion had moved from architecture to accessibility. DAO’s minimum buy-in on some projects starts at 100–200 square feet — roughly 6 lakhs at a 6,000-rupee-per-square-foot entry price. Payments are not binding installments in the traditional sense. A user can add lump sums whenever they have them — a bonus, a freelance payment — without penalty for missing a month.

“We want people to start their journey in their twenties and thirties,” Jawad said, “when they start earning, when they get annual bonuses — at least start the journey.” The longer-term vision is a system where someone who has accumulated 600 square feet of ownership can live in a 1,000-square-foot unit by paying rent on the remaining 400 square feet, and eventually buy out the rest from another unit holder on the same ledger.

Muzamil noted that the people most harmed by Pakistan’s opaque property market are not the wealthy — “the rich man knows, they have enough people to help them” — but the middle class, who are both the buyers and the unwitting financiers of development projects, bearing the risk without understanding it. DAO’s pitch is that transparent, cost-based pricing and a distributed ledger can change that equation.

Later in the discussion, both guests were asked how they see Pakistan in thirty years. Jawad was direct: “A much more just society, a much fairer economic system, with people having the liberty to do what they want and not being involved in an endless rat race.” Abdullah’s answer was more specific: a Pakistan where the 50% of the population under twenty-five years old has grown up to own independent housing, in cities designed for climate resilience and energy efficiency. “Players like us would want to be the ones solving this for the next thirty years.”