Whether we regard its state-of-the-art infrastructure; superior development standards; secure environment; top-of-the-line construction; the lush-greenery; modern amenities; or everything in between… Islamabad has always been the top choice among genuine real estate investors.
Well, the real estate developers of Islamabad have developed immaculately-designed housing schemes, but the potential of the commercial sector begets higher yields. Here, the primely located en route to CPEC makes the twin city worth investing in.
Do you know, the real estate of three cities… Islamabad, Karachi, and Lahore have the potential of $300B. It means it’s high time to invest in Islamabad.
Why Commercial Real Estate Investment is the BEST
Well, the reasons are simple…
Commercial Investment Yield Higher Returns
Investing in commercial real estate across Pakistan, is the prudent choice. Whether it is rental or capital gain, the owner of a commercial property earns the most, thanks to the technological boom and advancements in science and business across the country.
Reportedly, in Pakistan, commercial properties offer rental value of between 5-12%, whereas residential properties yield only 3-4%.
In residential settings, it’s not mandatory to increase rent annually, but in commercial propositions, a fixed rate of increase in rent is applied per annum. It means if you rent a commercial property, you will earn a progressive rental return. Also, the rental agreement is longer in commercial than the other counterpart.
And yes, in commercial real estate, the tenants do not abandon the place without legal notice served; they are bound to follow all the rules and regulations.
Commercial Properties are Cost-friendlier & Attract Savvy Tenants
Commercial real estate investment has a low maintenance cost. As the tenant is responsible for all maintenance and other expenses specified in the contract.
Often the architecture of commercial projects is plain and simple with less extravagant add-ons, which keep the property in a usable condition for longer duration. Also, the usage of the years.
Commercial tenants tend to be corporations, businesses, entrepreneurs, or something of the like, which is another great benefit of owning a commercial property. Because brand names back commercial tenants, which means they are more likely to respect the property, the architecture, and the respective rules.
While this is not always the case, qualified tenants often use the property just right and make the owner’s life easier.
Tax Benefits for Property Investment in Pakistan
Some tax benefits that commercial real estate enjoys in Pakistan are; minimal tax on rental income, favorable tax rates for long-term ownership of a property (more than a year), depreciation claim on properties, and some other concessions for real estate developers.
The updated tax rate on the value of a property in Pakistan are;
- 1% deem tax on a property valued more than 2.5 crores and a 20% tax on the proposed income of the respective 5%.
- 2% advanced tax on the sale or purchase of property tax filers
- The Capital gain tax period is 6 years – 15% in 1st year, 5% in 2nd year, 10% in 3rd year, and so on.
Islamabad - a Home to some Great Commercial Real Estate Investment Options
Before you invest commercially or residentially, you always weigh the pros and cons; let’s explore the commercial landscape of Islamabad, which makes the capital city worth investing in.
Islamabad is Strategically-fit for Commercial Property Investment
First thing first, the rental potential of the properties located in the twin cities; now, people residing in the capital city are paying 20% more rent than that in the last six months. The surge in the rent prices reached from 4.77 to 6.13% in a period of one year.
This shows there is a huge increase in the demand for the properties; speculations are that this rate will go up in the coming years. This is the best time to invest in commercial real estate in Islamabad.
Another point to be considered here is the emergence of the latest commercial projects in the city. Many up-and-coming real estate developers and builders launched their projects. We have also launched in the same timelines, and even the construction of our latest commercial project, Citadel 7 has also begun.
Islamabad - a Commercial Hub for Upcoming Projects and Expansions
In the twin cities of Pakistan, there are many commercial and residential projects that are under the developmental stage.
Many real estate developers in Pakistan know all the good reasons people prefer to live and invest in Islamabad. They are investing their fortunes in the city, even foreigners are planning to invest and start their businesses here.
However, if we specifically talk about residential societies, there are so many, like;
- Naya Pakistan Housing Scheme
- Eighteen
- Capital Smart City
- Multi Gardens B17
- Discovery Gardens
- Nova City
- Mumtaz City
Not only these, there are so many commercial developments too, which are on their way.
Major areas where real estate developers are doing their magic include; DHA, Bahria Town, Gulberg, Blue Area, Sector B-17, Park View City, and many others.
Islamabad - The top spot for Foreign Investment in Pakistan
The future is full of surprises for Islamabad-Rawalpindi; thanks to the resetting of ties with the USA, and in general, with the West. It depends on two things, how quickly the current political turmoil is and how Islamabad convinces the world that it has no intention of becoming any power bloc.
Some other considerations to attract foreign investments are; ease of doing business, fair market practices, protected intellectual property rights, consistent policies affecting foreign investors, and above all, where foreigners feel at home.
However, the recent interest rate policies by the State Bank of Pakistan (SBP) followed by skyrocketing treasury bill rates will surely accelerate foreign portfolio investment (FPI).
Wrapping Up
These are the reasons that make the twin cities fit for real estate investments; well, we have chosen this city for the very purpose.
Grab the most-suited investment opportunity and let your fortunes shine forever; your future self will be thankful to you.
If interested in our commercial project, Citadel 7, Real Estate Options
