Do you know that real estate investment is the most lucrative business in Pakistan?- It accounts for 2% of the total GDP of the country. Pakistanis spend around $5.2 billion on real estate construction yearly, that’s a huge number.
In 2017 real estate and construction industry increased by 9%, which indicates its strength and potential for investments.
Recently real estate is an emerging industry in Islamabad. A sudden and rapid increment in the property rates of Islamabad has been seen over a decade. The following factors played a crucial role in the greater demand for real estate investment.
Islamabad has a lot of scope for commercial real estate investment. New and unique projects are being introduced in this region, especially in zone 5, to cater to the needs of the population residing in the Twin Cities. Many massive projects such as Giga Mall, Silk Mall, D-Mall, Bahria Paradise, The Aquatic Mall, Builders Mall, Amazon Mall, and S Abdullah Builders Mall are set in the heart of the city.
Real Estate Investors are interested in both, commercial and residential properties, and each of them has its pros and cons. Among these two, commercial properties have proven to be more fruitful and here are all the right reasons why:`
The major benefit of investing in commercial property is that they yield high returns. If you are the owner of a commercial property located at some business center, its demand will be really high. The cost of commercial properties increases every now and then. If you buy a commercial property at the right time and in the right place, hold onto it for 5 to 10 years and rent it out to cover maintenance cost and taxes. By the end of this period, you can sell it for far more than what you bought it for.
Most of the investors buy commercial property as they are acquired for business and investments. They rent properties like offices and shops just to earn monthly income. If the real estate market is going well in your region, you can rent out space at a very good price. On the other hand, residential property is treated more as a necessity than an investment or business avenue.
The standard of commercial real estate is that the tenants are usually responsible for extra maintenance and repairs expenses, as they cannot accommodate any loss for the business. The commercial property owner can draft a contract that puts liability on the tenants to pay expenses of the maintenance before leasing the property. This allows the owner to be free from all the extra expenditures.
Commercial properties have a longer lease period, therefore there is a guarantee of a longer cash flow period. The value and price of the commercial property depend on the legal documents and by the rent decided in the presence of a lawyer. The agreed rent is an essential part of commercial plots, as when it comes to unpaid rents, the landlord reserves the right to penalize the tenant resulting in immediate eviction, agreed over the lease document.
As the offices barely change their location and stay at the same place for months, the owner can count on finding reliable tenants with long-term leases. In contrast, the tenants of residential property can leave suddenly and the owner can be left with an empty space that needs to be filled.
The major feature determining the value of the commercial property is its location. The more busy the location, the more valuable it will be. As commercial properties are rented or leased by different businesses, they are willing to pay more than the residential tenants as the properties are more valuable and located at the central locations.
Time is money when it comes to the construction of the building. The owners want to complete the project as quickly as possible. Commercial projects have higher construction cost and organized workflow, so, they tend to move precipitously.
The unique concepts and innovative approaches of the Al-Bari group of companies made it as one of the leading companies in the real estate industry. Over the two years, they have launched two massive projects, The Aquatic Mall and The Space Mall. They are remarkable projects with high returns, great annual profit, immediate rental returns, no recession, and a themed environment that offers far more than traditional shopping malls and residential flats. These malls promise transparent and secure investment. They also offer an easy and transparent 4-year payment plan.
Commercial real estate holds many advantages over residential investment and opens many non-property related opportunities as well. Commercial investment does not only mean top-notch buildings or skyscrapers touching the clouds, it includes; offices, shops, and retail units. Pakistan is trying to bring international investors to its real estate industry, so, it has a lot of potential and capacity to prosper.